What To Consider When Filing For Chapter 7 Bankruptcy
With the recent recession period in America and other countries, there are many people who have gotten into huge amounts of debt and have no means of repaying their creditors. Chapter 7 bankruptcy is one of the options which have been put in place to help people get out of debt. This solution requires that one surrenders all their non-exempt assets to the courts of law so that a trustee is appointed and he liquidates them in order to pay the creditors.
The requirements of pleading insolvency is what proves that one is totally incapable of paying off their debts. This can be depicted through their financial records and credit reports. It is therefore mandatory that you provide the court with a list of your assets as well as your latest credit report. This will enable them to assess whether or not you are bankrupt or you can still repay your debts.
Consider the amount of debt you owe and get a clear credit report and ask a financial analyst to assess the report for you. Ensure that your report has no mistakes and your debts are all valid.
You must also assess your non-exempt assets. The exempt assets only cover things like auto mobiles, furniture and sometimes the mortgage. If you have businesses or boats and other luxurious assets, then you must assess whether or not you can let go of them without suffering major losses. If you own a business with other partners then you might want to opt for other means as they might unfairly lose their business because of your action.
The time frame within which your case is dealt with is also a matter of importance. Most people who plead insolvency often aim to be absolved or discharged from paying off their debts. Time will be determined by the number of assets that you have and the number of objections you receive from your creditors.
If you have many assets that can be liquidated, then there are chances that you will receive many objections from creditors who will want the property given to them directly without the mediation of a trustee appointed by the court. If you have a competent attorney you will be able to counter these objections more easily. On the other hand, those who have no assets might receive less objections and their cases may be processes faster. In general the insolvency may take a period of months or even years before being approved.
Your attorney must also be sympathetic with you. He must realize that your financial situation is already overwhelming and therefore you cannot pay him all the fees at once. He must exercise patience when dealing with you and not pester you to pay him his fees.
The attorney of your choice must also refer you to a good debt counselor so as to help you avoid financial jeopardy in future. This will show that he cares about your situation and is more interested in helping you rather than the money and other things. Your attorney must also explain all the implications of the chapter 7 bankruptcy on your social and financial records. This way you will make a decision based on facts.
Before you file for bankruptcy, make sure you check Sam Caruso\’s\’ excellent website on avoiding Filing For Chapter 7 Bankruptcy, and Stop Foreclosure By Filing For Bankruptcy
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