Chapter 7 bankruptcy is also referred to as a liquidation of debt. It will allow an individual’s debt to be discharged as long as the debts are permitted to be discharged. This type of bankruptcy was created to act as an orderly and well supervised procedure by the bankruptcy court where a court appointed trustee collects the individual’s assets and liquidate them for cash. The liquidated funds are then distributed among creditors. Individuals who are looking for specific Chapter 7 bankruptcy information should consult with a bankruptcy attorney.
Mortgages and Other Types of Secured Debt
An example of a secured debt is when you apply for a loan and provide the lender with the lien or mortgage to your home. The home acts as your collateral in case you default on the loan. If the money that was borrowed was used to purchase assets such as secured property, the lender will be able to retrieve that security once you file for Chapter 7 bankruptcy.
As a result, the debt is discharged, and you will not have to pay the creditor any more money. However, there are additional steps that you would need to take in order to not lose your home. You can also choose to just surrender the home if you do not want to deal with a possible foreclosure. An experienced attorney can provide you with more Chapter 7 bankruptcy information relevant to your case.
Many of the debts that you may owe may be considered unsecured debts, especially if they do not have the security of collateral. These types of loans include credit cards. It is also important to note that some secured debts may be considered unsecured if the collateral was not purchased with the loan monies.
Non Dischargeable Debts
You may have some debts that cannot be discharged by the bankruptcy court. These types of debts are:
- Child support
- Student loans (can be discharged in rare circumstances)
After consulting with an attorney and getting the basic Chapter 7 bankruptcy information, you will then need to begin the process of filing your case. The bankruptcy attorney will guide you through these steps so you can get a bankruptcy discharge and have a new financial slate.
Contact us today and speak with one of our qualified attorneys to get more Chapter 7 bankruptcy information and decide if filing bankruptcy is the best option for you.