When you come right down to it a Chapter 7 bankruptcy gives you relief from nearly all, if not all, of your debt. It ultimately offers you a chance to start over with your finances.
The legislation governing Chapter 7 bankruptcy has changed extensively over the past several years. The purpose, however, hasn’t changed. It exists to help individuals who find themselves in a financial situation where they have an insurmountable amount of debt with no hope of ever being able to totally pay that debt off.
To get the bankruptcy process started, you have to file a petition in Federal bankruptcy court. It is recommended that you use an attorney to handle this filing for you. Once your attorney files your petition, you get instantaneous protection from any lawsuit by your creditors. That protection is designated an “automatic stay.” Essentially, the automatic stay of bankruptcy stops all collection action by your lenders. In actuality, as soon as you file your bankruptcy petition, your debt collectors are prohibited by federal law from contacting you for repayment or from filing any sort of collection claim against you.
As part of your bankruptcy proceeding, you’ll have to be present at a hearing at bankruptcy court. This hearing customarily takes place in a room with you, the bankruptcy trustee (i.e., the individual assigned by the court to administer your case) and your attorney. The whole process ordinarily only requires about fifteen minutes, at some stage in which the trustee will ask you a number of questions with reference to your take-home pay and your debts. At the conclusion of the hearing, the trustee makes a recommendation to the bankruptcy court to discharge your debt. A discharge order is subsequently mailed to you. It may possibly take some months for you to actually get your discharge order.
Be aware that your creditors might appear at your hearing to speak for their benefit and oppose your bankruptcy discharge. However, it is really an exceptional situation where a creditor actually shows up. In most cases, the bankruptcy is fairly easily completed without any protests from lenders.
Bankruptcy may actually be your only out if you’re burdened under a considerable quantity of debt that you have no means to repay. Thus, if you’re in debt way over your head and are having difficulty making normal payments, you owe it to yourself to at least speak with a bankruptcy lawyer concerning the likelihood of filing a Chapter 7 bankruptcy.
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