Bankruptcy is often seen as a last resort way to get relief from unmanageable debt — because it is. If you are finding yourself unable to pay for your debts each month in addition to your living expenses, you might be better off filing Chapter 7 bankruptcy, which gives individuals a fresh financial start and relief from most debts. If you don’t know very much about bankruptcy, don’t worry — finding more information is easy.
Here are the top five questions asked about Chapter 7 bankruptcy — and their answers:
Q: What is Chapter 7 bankruptcy?
A: As stated before, Chapter 7 bankruptcies give individuals a fresh start with their finances by completely forgiving most debts. In order to pay for these debts, it’s often required of a person to surrender nonexempt properties and assets. However, most people who file Chapter 7 bankruptcy are able to keep most, if not all, of their property and belongings.
Q: Do I need to hire a Chapter 7 bankruptcy attorney?
A: No — but you should. Hiring an attorney who specializes in bankruptcies is recommended because they can offer you respite from creditor harassment and the best advice on how and when to file bankruptcy.
Q: Will my credit score be bad forever if I file for bankruptcy?
A: No. Filing a Chapter 7 bankruptcy will harm your credit score, but it will only stay on your record for 10 years. There are a variety of ways you can slowly rebuild your credit after filing bankruptcy.
Q: How long does it take to complete a Chapter 7 bankruptcy?
A: Typically, it takes approximately six months for a Chapter 7 bankruptcy to clear.
Q: What kinds of debt won’t be discharged during my bankruptcy?
A: Not all debts get erased when you file for bankruptcy — the U.S. bankruptcy code requires you to pay certain types of debts no matter what. These debts include student loans (unless undue hardship is provable), recent real estate and income taxes, certain fines (including criminal and DUI fines), alimony, child or spousal support, and other debts that a local bankruptcy attorney can explain to you. To learn more, read this.