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The Basics Of Filing Chapter 7

What do you need to do to file Chapter 7? For most people, there will come a time when they just wish they could wipe out the pile of debt that they are under. They would love to just be able to go back and make the right decisions about how to use their money. As hard as it can seem, it is often increasing important to insure that you do make the right decisions. Yet, there comes a time when for some it is necessary to consider filing Chapter 7.

Understanding what that actually means and entails is something different, though. Most people know what bankruptcy is but don’t know the difference in Chapter 7 and Chapter 13. They don’t know how to do it nor do they realize that it is harder than ever to have their debts discharged. Nevertheless, it is something you have to plan for. Here are some things that should be known.

Chapter 7: In this type of bankruptcy filing, your debts are discharged. All debts that are filed under this and are approved for discharge will be debts you are no longer responsible for. This type of bankruptcy filing is best for those that don’t have assets or have assets that are not valuable enough for the creditors to file against.

Chapter 13: This type of filing is much different. Here, your debts are adjusted. This provides a temporary halt to the foreclosures and collections that are happening to you, in order for you to spend the next three to five years trying to pay down the debt that you owe. It will allow you to restructure the debt into easier to manage terms. In addition, it will change the interest rate on your loans to make them more affordable.

Those that are considering either of these types of bankruptcies will need to talk with an educated attorney about the matter. For many, the process of determining if they qualify for Chapter 7 or Chapter 13 will be determined by the attorney who will administer a means test to determine this. The end result is that it is necessary for you to determine if filing Chapter 7 is the right choice for your financial future. With new laws in place, it may or may not be something that you can do at all.