With the recent recession period in America and other countries, there are many people who have gotten into huge amounts of debt and have no means of repaying their creditors. Chapter 7 bankruptcy is one of the options which have been put in place to help people get out of debt. This solution requires that one surrenders all their non-exempt assets to the courts of law so that a trustee is appointed and he liquidates them in order to pay the creditors.
The requirements of pleading insolvency is what proves that one is totally incapable of paying off their debts. This can be depicted through their financial records and credit reports. It is therefore mandatory that you provide the court with a list of your assets as well as your latest credit report. This will enable them to assess whether or not you are bankrupt or you can still repay your debts.
Consider the amount of debt you owe and get a clear credit report and ask a financial analyst to assess the report for you. Ensure that your report has no mistakes and your debts are all valid.
The attorney will also help you assess your financial situation and come up with the most appropriate solution to your situation. When one is deeply overwhelmed by debt they might have a difficult time thinking through their solutions and might want to opt for the easiest way out when in fact shortcuts might lead them to even bigger problems. A financial attorney will always help you come up with the best solution during the difficult period.
Another thing you must consider is the amount of time it will take for your plea to be approved. This varies with each individual depending on certain factors. The first consideration is whether or not you have valuable assets. When you do not have assets, then there are less objections from your creditors and this speeds up the approval process. However, for those who have assets then many objections are likely to arise from their creditors and delay the process. This process might take between months and even years to be approved.
The implications that your plea will have on your financial record and social life are also important factors to bear in mind. This is because some employers will not want to employ a bankrupt individual and you will not be eligible for credit facilities in as long as the financial predicament is in your record.
Whether or not you hire an attorney is entirely up to you. In some cases an attorney might prove to be a luxury especially if you’re deep in debt. However, the services of an attorney might help you fend off the persistent harassing creditors and also provide you with guidance in your situation. A good attorney might also help you fight objections put up by your creditors.
There are also some few disadvantages of filing for chapter 7 bankruptcy. You might lose your major assets like businesses and land among other property that is considered non exempt. This might have particularly negative implications on the people whom you own share property with. This is because the court might liquidate these properties regardless of whether they are co-owned. The record of insolvency might also stain your financial record and bring stigma on your person as you will not get credit until all the records will be erased. That might take up quite a number of years.
Before you file for bankruptcy, make sure you check Sam Caruso’s’ excellent website on avoiding Filing For Chapter 7 Bankruptcy, and Filing For Chapter 13 Bankruptcy