There is no doubt that the economic climate affects each and every one of us, contributing to large amounts of accrued debts and of which become overbearing to say the least. Personal factors such as illness, disability or even unemployment may well be the root cause of these financial difficulties, however when we find ourselves in such a situation something needs to be done.
Bankruptcy is an option that is often times one of the only ways out of this type of situation, however it is important to know the differences between the various types of options that one has, of which reiterates the importance of choosing a good bankruptcy lawyer to not only provide the right advice but also to help navigate the fields of filing for bankruptcy.
Chapter 7 bankruptcies, according to the statistics provided by the US Bankruptcy Court: Eastern District of California, is the most utilized option for consumers to file for bankruptcy, with the second most popular being that of Chapter 13 bankruptcy. The filings for Chapter 7 bankruptcy accounted for almost 81% of all bankruptcy filings in the eastern district of California in 2010, and a similar percentage of just over 82% of all filings were Chapter 7 bankruptcy filings in 2009. The figure below highlights how much more Chapter 7 bankruptcy filing is used, as compared to the second most popular option being that of Chapter 13 bankruptcy. Based on the figures below it is important to understand what the Chapter 7 bankruptcy is all about.
Chapter 7 bankruptcy can be summed up in the fact that the assets, such as equipment, property and so forth, of the debtor are liquidated due to the fact that the debtor cannot pay or at least service their current debts. Within this process there are certain types of properties that are exempt from the liquidation process, and the value of such exempt properties depends upon the specific state in question. Unsecured debts are in the most part discharged, in other words are written off, however there are some debts that cannot be discharged, of which include the likes of child support, income taxes (within a specific time period of the filing), and student loans – of which there are exceptions to this too.
As can be seen from the brief description above, a Chapter 7 bankruptcy filing can become fairly complicated and technical to say the least, and a bankruptcy lawyer is highly recommended to explain the process, and perhaps more importantly the implications of a Chapter 7 bankruptcy filing.
There is no doubt that a Chapter 7 bankruptcy can in fact be a lifeline for those that are really swamped in debt, but making an informed decision regarding the entire process is an absolute must, as with any decision of this nature.
This information is for reference only, please consult with an experienced Bankruptcy lawyer for additional details and information.
* All information on this site provided is for informational or educational purposes only, nothing constitutes legal advice whatsoever.
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