Are you considering seeking help for your financial situation? If so, have you thought about using Chapter 7 bankruptcy? Chapter 7 bankruptcy is a great option for some situations, but it is not for everyone. If you want relief from your debts, you might want to learn more about Chapter 7 bankruptcy before contacting an attorney. Here are four facts to learn about it before you decide if you want to pursue it.
1. It Is the Liquidation Branch of Bankruptcy
The first fact about Chapter 7 is that it is the liquidation branch. The main thing to know about this is that filing for Chapter 7 might require surrendering some assets you have. For example, if you have cash in the bank, you might have to give it up. If you have an extra vehicle, you might lose that if you file. The purpose of liquidating is to generate some cash to use to repay some debts that you owe.
2. It Provides Relief from Your Creditors
The second fact is that Chapter 7 gives you relief from your creditors. All the branches of bankruptcy offer creditor relief. After filing your case, the court notifies your creditors that you filed for Chapter 7. When they receive this notification, they must stop all collection efforts. As a result, your phone will no longer ring with creditor calls. You will no longer receive letters in the mail asking for money, and you will not receive emails or texts either.
3. It Offers Debt Forgiveness
The third fact is that Chapter 7 offers debt forgiveness. If you have qualifying debts, the court will forgive them, and you will not have to repay them. Debt forgiveness is available only in Chapter 7. If you use Chapter 13, you will probably have to repay most of your debts.
4. It Is Fast
The final fact about Chapter 7 is that it is fast. It does not require a repayment plan for three to five years like Chapter 13. Instead, you might complete your case within six months from your filing date. The Chapter 7 bankruptcy will remain on your credit report for ten years, but the case itself does not take long to complete.
As you read these facts about Chapter 7, you might be interested in learning more. If you would like more information about the eligibility requirements and costs, talk to a bankruptcy attorney in your area today.