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What Filing Chapter 7 Really Means

Those that are filing Chapter 7 are looking for a fresh start to their debts. Often times this is the only way to get through the potential mounds of debt that have piled up. Although many people think badly of this filing, it really can be a necessary obstacle. For most that file bankruptcy, the bottom line is not that they are trying to get out of paying for their debts, but rather that they are looking for a way to live their lives. Chapter 7 is not a bad thing when it provides countless opportunities to those that have simply made a mistake.

What Happens?

Many people know what bankruptcy is, but they don’t realize what it actually means. First off, there are two types of bankruptcy that can be filed by an individual. First, you have Chapter 7 which will work to erase debts and give the individual or couple a fresh start without having to pay back any of the debt they owe. The second type of bankruptcy is that of Chapter 13. In this type of bankruptcy, the individual or couple will have to pay back the money, but the debt is restructured and so that they actually can pay the money back. In both cases, a black mark is placed on your credit report which will stay with you for the next ten years.

During the next years, you won’t have to pay back all of the debt that you filed Chapter 7 for. Anything that is new after that point or anything that was not included is necessary to pay back. Legally the debtors that you owed money can no longer attempt to collect the debt from you. This is also a time where it will be much harder to get loans. If you do get them, they are likely to be outrageous in their interest rates.

Filing Chapter 7 is almost a necessity to many. Those that have had to deal with expensive medical bills or those that were careless with credit cards often find themselves caught, under a rock and there is no way out. It is very hard to pull out of a situation like this, especially when there is no simple solution. For many, Chapter 7 really means a new beginning and the hope of a new future without debt.