Bankruptcy is a difficult subject to approach, especially the variant that requires most remaining assets. This version of bankruptcy, called Chapter 7 after its place in the bankruptcy code in federal law, is often best for debtors on the first filing.
- What is Chapter 7 compared to other bankruptcy options?
Chapter 7 is often called liquidation, because most assets and properties are sold or other disposed to settle debts with hard currency. Chapter 11, often called reorganization, involves a repayment plan and may not take up all the available assets that a person or business has available. Chapter 13 is often reserved for family-owned businesses with specific needs.
- What are the advantages of Chapter 7?
Chapter 7 bankruptcy often makes sense for individuals with high levels of debt. As well as having most or all debts forgiven or settled by the end of the process, the government will appoint a trustee to help review assets and debts to work out the ultimate solution to problems with creditors.
- What are the disadvantages of Chapter 7?
Since a trustee may claim and dispose of all major assets that belong to the person filing for bankruptcy, emergence is a fresh start in almost every conceivable way. Credit will be repaired over years of good financial conduct, but a lot of the property and possessions that are handed over in Chapter 7 bankruptcy may never be recovered.
- Who can help with Chapter 7 filings?
A lawyer may be engaged to help people looking at the option of bankruptcy. An attorney may help make a filing successful, saving valuable time and money.