Chapter 7 Bankruptcy

Chapter 7 Bankruptcy Doesn't Have to Ruin Your Credit Score; Let it Work for You

Chapter 7 Bankruptcy is a type of bankruptcy that you will file if you have no money to pay off all of your debts. Basically, Chapter 7 Bankruptcy is a declaration that you make stating that you have no money and that you will offer your possessions in place of money. Therefore, you may have to give up your car, your home and personal affects of any value. However, you will be entitled to keep those items belonging to you that you use for your work, such as your toolkit, if you are a contractor, or your car, if you are a delivery person. You can also keep a portion of the equity of your home or car in some cases. Here is some more information about Chapter 7 Bankruptcy.

Who Files for Chapter 7 Bankruptcy

Obviously, people don't file for bankruptcy for fun. If you are in a serious financial situation and have debt that you cannot seem to get under control, then you may be the ideal candidate for Chapter 7 Bankruptcy. Sometimes, you can rid yourself of bankruptcy without a great deal of time spent. You can contact agencies that can help you work down or consolidate your debt, or you can get help removing interest rates so that you can more easily pay your debts. Chapter 7 Bankruptcy, for many people, is a final measure to help them overcome debt.

Does it Hurt My Credit?

Yes, but not forever. Chapter 7 Bankruptcy will show up on your credit report. However, any bankruptcy will show up on your credit report. If you continue to work off additional credit and make a diligent effort to overcome debt in the future, then you have a substantial chance of overcoming the hurdle of Chapter 7 Bankruptcy. Most people who file for Chapter 7 end of filing again because they do not learn the basics of good accounting. If you file once, make an effort to learn how to pay bills and stay out of debt so that you can avoid filing twice.

What You May Lose

When you file for Chapter 7 Bankruptcy, you are admitting to the government that you have no money. You are surrendering your personal affects for liquidation. This means that everything you own, with the exception of items that you use for work and with a few other exceptions, will go. This means that you will lose your home, your car and anything else of value, but that you will, once and for all, have a clean slate when it comes to your debt.

Are There Other Bankruptcy Filings?

Yes. There is a huge variety of bankruptcy filings that you can select from. These include Chapter 20 and Chapter 13. Chapter 7 is the most popular bankruptcy because it rids your debt. However, you will end up without your home or personal affects.

Of course, nobody wants to declare bankruptcy, but in the event that you have no other option to help you get out of debt, Chapter 7 Bankruptcy might be your best bet. Once you file, you are cleared or forgiven of all of your debts and you are able to begin with a clean slate. Your credit score, of course, will be affected for about seven years, but you will be able to still purchase a house and car again once you accumulate enough money to do so. Chapter 7 Bankruptcy is designed to give people a fresh start when they have worked themselves so far into a hole that they cannot possibly get out on their own. Many people file for it and are still able to lead happy, healthy lives. Be sure to due diligent research before filing.