Chapter 7 Bankruptcy Law Information

The following Chapter 7 bankruptcy law information will highlight the features of this process for debt relief.

The decision to file for bankruptcy is a serious step and should only be taken when all other efforts to sort financial problems have failed. Most consumers who declare bankruptcy do so under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code. (Chapter 11 bankruptcy is usually limited to businesses.)

Chapter 7 Bankruptcy Law Information

Bankruptcy Chapter 7 is called the "complete relief bankruptcy". That means the debtor is released from all repayment responsibilities for the debts included in the bankruptcy. It allows the courts to waive consumer debt and give the debtor a fresh new start.

Complete debt relief comes at a very high price, however. Chapter 7 bankruptcy can stay on your credit report for up to 10 years from the date you file. That's three more years than most negative information. In addition, it is one of the worst marks on your credit report in the eyes of future creditors. A Chapter 7 bankruptcy may be the only way out if you are deeply in debt, but future potential credit grantors may interpret it as a sign of both financial irresponsibility and a very high credit risk. They might think that if you bailed out once, what would stop you from doing it again?

In 2005, the new legislation passed with the bankruptcy laws change, made it harder than ever to qualify for bankruptcy Chapter 7.

Even though Chapter 7 bankruptcy involves the surrender and liquidation of most of your assets, with the bankruptcy laws change, your bankruptcy chapter 7 filing will still be reviewed by the court. If the court decides you have a decent income and the ability to repay all or some of your debt, you may be ordered to file under the more strenuous Chapter 13 Bankruptcy, which requires you to repay by installments.

We would suggest that the best thing to do is consult with an attorney or financial advisor familiar with bankruptcy law information and recent changes. Discuss with them, any legal or financial issues involved with your credit decisions, the bankruptcy laws change, and your eligibility to file Bankruptcy Chapter 7.

latest news   Note: Declaring Bankruptcy On Student Loans
Unless the borrower can establish substantial hardship, default student loans bankruptcy is non dischargeable and will still require repayment.

A good suggestion if you think you need to file bankruptcy on student loans, may be to eliminate other debts that compete for your repayment dollars. Some courts will permit debtors to classify student loans separately in Chapter 13 and pay student loans a greater percentage than other unsecured debt. Again, consult an attorney or your financial advisor for the best approach.

  For more Chapter 7 bankruptcy law information as well as the recent changes in the bankruptcy laws, go here.



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