Some people refer to Chapter 7 bankruptcy as a liquidation of debt. This type of bankruptcy allows the courts to discharge an individual’s debt as long as the debts meet certain guidelines. The courts created this type of bankruptcy to act as an orderly and supervised procedure. A court appointed trustee collects the individual’s assets and liquidates them for cash. The courts then distribute the liquidated funds among creditors. Individuals who are looking for specific Chapter 7 bankruptcy information should consult with a bankruptcy attorney to determine if Chapter 7 is right for them.
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 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 court discharges the debt, 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.
Unsecured Debts
Creditors consider many of the debts that you owe as 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 the courts consider some secured debts as unsecured if you did not purchase the collateral with the loan monies.
Non Dischargeable Debts
You may have some debts that the bankruptcy court cannot discharge. These types of debts are:
- Taxes
- Alimony
- Child support
- Student loans (can be discharged in rare circumstances)
- Judgments
After consulting with an attorney and getting the basic Chapter 7 bankruptcy information, you will then need to begin the chapter 7 bankruptcy 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.