Chapter 7 Bankruptcy
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is also called a liquidation bankruptcy. It is the most common form of bankruptcy filed by individuals across our country. Basically, it has the power to wipe out all, or most, of your debt (this is called a discharge of debts). You will no longer be obligated to pay the discharged debts, which allows you the opportunity to start fresh. There are some debts, however, that you will not be able to get rid of, even with Chapter 7 bankruptcy. These include child support, student loans, and some taxes (see information on Chapter 13 bankruptcy if these are your issues). Some of the debts that you WILL be discharged of include credit cards, medical bills, utility bills, personal loans, and certain bank loans, liens, and mortgages, depending on the circumstances.
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Life During Chapter 7 Bankruptcy
We understand that deciding to file for the full bankruptcy can make you feel like failure, but this is not the case. In fact, it should be thought as a fresh start and a new beginning! Bankruptcy can impact your credit rating, but what most people don’t know is that sometimes bankruptcy can actually INCREASE your credit score because your debts are wiped out. Also, there is no more negative reporting starting on the day you file your Chapter 7 case, so you start rebuilding your credit immediately. What about all of that stuff you would have been doing if you had the money – saving for your kids’ college, your next vacation, your own retirement – you can do that now! No creditor is going to be calling you or writing you asking for money. You will be done with all that and looking toward the financial stability of your future.
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