Financial difficulties can impact everything from your own mental health to your personal relationships. Consequently, it is no wonder that so many people seek financial relief in the form of a Chapter 7 bankruptcy settlement. If you are considering filing for this type of bankruptcy in your own life, taking the time to review the answers to a few of the most frequently asked questions below may be able to assist you in deciding if this is the right choice for you.
Will Chapter 7 bankruptcy wipe out all of your debts?
The answer to this question will depend upon what type of debts you carry. This is because only certain debts can be discharged as part of Chapter 7 bankruptcy. While there are a few exceptions, Chapter 7 bankruptcy will allow you to wipe out debts that are not secured with real property. For instance, you will be able to discharge credit card and medical debt. However, you will not be able to wipe out your mortgage or auto loan if you are still in possession of the property that was used to secure these loans.
Can creditors still attempt to collect from you after you file for bankruptcy?
This will depend greatly upon your own actions after filing for bankruptcy. While the law does protect you from creditors during the bankruptcy process, it is extremely important that you do not communicate directly with your creditors, make any partial payments, or enter into any settlement agreements with your creditors during this time. Doing so can result in your creditors being able to legally reestablish their rights to collect on your debt.
Will you lose your home and vehicle if you choose to file for bankruptcy?
Chapter 7 bankruptcy does allow you to keep personal property up to a limit. Assuming that your personal property does not exceed the protected asset values in your state and you are current on any payments you owe on this property, you will be able to keep this property as part of your bankruptcy settlement.
Do you need to hire an attorney when filing for Chapter 7 bankruptcy?
While the law does not require that you hire an attorney when filing for Chapter 7 bankruptcy, it is certainly in your best interest to do so. These legal experts will be able to help you determine just how much of your debt can be discharged as part of your case, ensure that as many of your personal assets as possible remain protected against seizure, and help you to navigate the often complex rules and regulations associated with the legal process of completing your bankruptcy petition.
To learn more, contact a Chapter 7 bankruptcy service.