For some consumers facing overwhelming debt, filing for Chapter 7 bankruptcy may be one of the few ways to get a "fresh start" with their debt, essentially erasing the obligation to repay many types of debt a filer may owe. In this section, you can find information on who qualifies for Chapter 7 bankruptcy, how debt is addressed in a Chapter 7 filing, and an overview of the rules covering this type of bankruptcy. You can also find articles explaining the difference between Chapter 13 and Chapter 7 bankruptcies, helpful checklists for Chapter 7 filers, and more.
Who Can File for Chapter 7 Bankruptcy?
Bankruptcy judges once had substantial discretion in determining whether or not to grant Chapter 7 bankruptcy to applicants, but since 2005 regulations have been introduced that created more specific criteria for granting or denying Chapter 7 relief to debtors.
Under these new regulations the court may convert an ineligible debtor's Chapter 7 action into a Chapter 13 bankruptcy, except where a disabled veteran seeks to eliminate debt incurred while on active military duty or where filers with debt that came primarily from operating a business, though all other filers in this circumstance must also qualify for Chapter 7 relief. The following circumstances could render a debtor ineligible for Chapter 7 bankruptcy:
Pros and Cons of Declaring Bankruptcy under Chapter 7
It can be a very difficult decision to file for bankruptcy. Since the impacts of a bankruptcy can last for years it is worth considering the pros and cons of Chapter 7 bankruptcy carefully before deciding to file. Here are some important considerations relating to this form of debt relief:
Bankruptcy Exemptions: Chapter 7
Although Chapter 7 bankruptcy requires the liquidation of many assets there are certain kinds of property that may be protected from loss. The foregoing are the most common exemptions, though it should be noted that many are qualified or limited, follow the links to our article on the issue for more detail:
Need Help Filing for Chapter 7 Bankruptcy? Talk to an Attorney
It can be overwhelming being in debt, and sometimes your best option is to file for bankruptcy. But, it's likely that you'll have questions and not know where to start. Luckily, you can contact an experienced bankruptcy attorney who can answer any questions and guide you through the process of filing for Chapter 7 bankruptcy.