Some decisions in life are easy. Deciding to file for bankruptcy is not easy to do. It’s a bit like getting divorced – it was never intended to happen, but sometimes it’s the best choice remaining in bad circumstances.
What is Chapter 7 Bankruptcy?
Federal laws were passed to establish a bankruptcy system that would allow both private citizens and businesses to get debt relief and a fresh start. The intent is to allow honest debtors to begin again without harassment from creditors. More individuals file for Chapter 7 bankruptcy than for any other type. It is usually most suitable for someone with a large amount of unsecured debt (like medical and credit card bills) and insufficient income to pay it all off. Non-exempt assets are sold to pay off creditors. In practice, most people filing for Chapter 7 keep most or all of their property as it is considered to be exempt.
What Happens After the Chapter 7 Bankruptcy is Filed?
The creditors stop calling. An ‘automatic stay’ lets creditors know that the bankruptcy has been filed and they must cease collection attempts. They cannot call, send letters, file lawsuits, seize assets or garnish wages in most cases. Money owed for child support and alimony still must be paid.
The trustee will schedule a meeting with creditors and will question the debtor about assets, income and other pertinent information and make a decision about the disposition of the case. The discharge of debts usually takes about two months.
What Will Life be Like After the Bankruptcy?
It’s wise to set a doable budget and stick to it. Most, if not all, of the debts are gone. There will never be a better time to learn good money management skills.
The down-side to Schaumburg Chapter 7 bankruptcy is that is will stay on the credit report for 10 years. If a prospective employer or landlord runs a credit check, they will see the bankruptcy.
One way to re-establish credit is to get a prepaid card, use it for certain monthly bills, then pay the entire balance in full every month.
The attorneys at Ledford & Wu focus their time and skills on bankruptcy and consumer rights cases. This wealth of experience offers a substantial benefit to their clients. Contact the firm for a free initial consultation.
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