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Do you have mounting debt and no present or future possibilities for paying it off? Are creditors harassing you constantly about repayment? Do you feel as if you are trapped, and that your financial future is in severe jeopardy? For many Americans facing unemployment, medical misfortunes, and divorce, bankruptcy is a viable option to get back on track to financial prosperity. If you are hesitant to take such a drastic step, educating yourself about bankruptcy is a good idea and will help you to make an informed decision. Check out the following article to learn more about Chapter 7 bankruptcy in Tacoma or your area. Chapter 7 Bankruptcy: What You Need to Know Filing for bankruptcy has serious ramifications, and therefore it is important to ensure that a petition is the right course of action for you and your family. A Chapter 7 bankruptcy is a popular option for those facing bankruptcy for a variety of reasons. Read on to learn more: - A Chapter 7 petition grants you an automatic stay: As soon as your petition is filed you will receive an automatic stay against all creditors. This means that your lenders cannot contact you or seek repayment for your debts. For those who are experiencing frequent and aggressive contact from creditors, the automatic stay provides much needed relief from harassment.
- Chapter 7 will absolve you of debt: Once your petition is granted, all of your debt will be forgiven. While this action is not without significant consequence, if you have no ability to repay your debts and expect them to only grow over time, then Chapter 7 bankruptcy provides the relief you desperately need.
- Chapter 7 cannot absolve all types of debt: While nearly all debt is forgiven with a Chapter 7 petition, there are certain types of debt that cannot be absolved. This debt includes back taxes, certain types of student loans, alimony or child support, and any recent luxuries.
- Chapter 7 requires a liquidation of assets: If you own any property or assets and are petitioning for Chapter 7 bankruptcy, the total debt forgiveness you will experience does come at a price. You can expect that all of your assets will be liquidated in an attempt to pay back creditors what they are owed. This means if you own property, a home, or a vehicle, these assets may be taken from you.
- Chapter 7 does not include co-debtors: If you had a friend or family member co-sign a loan with you, do not expect your co-debtor to be released from his or her obligation to continue to pay off that debt.
- Chapter 7 does not require you to give up all your property: While you will give up your major assets, there are certain assets that mean a lot to you that are exempt from forfeit when it comes to filing for Chapter 7. Assets you will be able to keep include cars worth a certain value, household furnishings that you need for day-to-day living, life insurance, pensions, and public benefits. Speak with a bankruptcy attorney for a complete list of items that are exempt from forfeit.
- Chapter 7 requires credit counseling: Before filing a petition, you will be required to undergo credit counseling. Your petition will not be granted until you complete this counseling. Credit counseling is inexpensive (less than $100) and only takes 1-2 hours to complete. You can even complete this counseling over the phone or internet. Make sure that you receive documentation of having completed credit counseling, and that you receive this counseling through a source approved by your state.
To learn more about Chapter 7 bankruptcy in Tacoma, or your area, contact a bankruptcy attorney.
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