A THUMBNAIL SKETCH OF BANKRUPTCY
Chapter 7 Bankruptcy -Wipe the Slate Clean
Filing Chapter 7 may be the best and most responsible way to resolve your debt and move on with your life. It may also help your creditors save money. If a creditor knows that a borrower is bankrupt, the creditor won’t throw away money trying to collect a debt that can’t be repaid.
For consumers who can no longer reasonably afford the minimum payments on their debt, Chapter 7 Bankruptcy offers the chance for a whole new start. It is for those who need debt relief from unsecured creditors and secured creditors for property (either collateral or security) they no longer want or can no longer afford. In Chapter 7 Bankruptcy a trustee will, liquidate unexempt assets and distribute them to creditors while giving the consumer a new start.
Examples of unsecured debts include:
- Medical Bills
- Credit Cards
- Most Judgments
- Garnishments
- Pay-Day Loans
Common secured consumer debts include:
- Automobile Loans
- Home Mortgages
- Financing for Motorcycles and Boats
As of 2005, the bankruptcy law was changed to require the individual who files Chapter 7 to pass a means test. The means test measures income against monthly expenses according to standards set by the Internal Revenue Service and the U. S. Bankruptcy Trustees. It is possible to have too much income for Chapter 7. In such cases, consumers usually turn to Chapter 13.
Some people say this should be the last house on the block for consumers seeking debt relief. We say that it depends on which end of the street you are starting from! Call 800-860-1004 for a free consultation.
