Unfortunate economic times can fall hard on people who have huge debts to pay off. Filing a bankruptcy case means a debtor is not left with any way to repay his creditors. This is the ultimate step that an individual can take under such tough situations. Bankruptcy cases are the intricate legal proceedings that relieve a debtor of his huge debts either by liquidating his non-exempt assets or reorganizing them.
Of the two most commonly preferred chapters under the bankruptcy codes, one is chapter 7. A chapter 7 bankruptcy case starts as soon as the court appoints a trustee who takes over the entire non-exempt property of the concerned debtor. He liquidates the assets and pays off the creditors who are involved with the debtor. Opting for a chapter 7 bankruptcy can lead to potential changes in your life. Here are a few advantages of filing a bankruptcy case under chapter 7.
For example if you want to keep your car you have to keep your car payment. In chapter 13 your debt is reorganized.
Court protection – A significant benefit of this option is that under this code of bankruptcy, a debtor cannot be contacted by any of his creditors or agencies. This is a protection that a debtor can avail to as and when he applies for chapter 7 bankruptcy. Reaffirmation of debts is the only reason for which a debtor can be contacted as debts like mortgage or a car loan needs to be paid off separately.
After you have decided which type of bankruptcy to file you will need to attend pre-bankruptcy credit counseling with an approved agency. This is mandated by the court so that you are aware of all options available to you. This will lead you to the final steps of the bankruptcy checklist.
The final step before creating your petition and filing for bankruptcy is to gather all of your documents. The things you need before filing are your tax returns, two years for a Ch. 7 and three years for a Ch. 13, 6 months of pay stubs or proof of income, certificate of pre-bankruptcy credit counseling and your bank statements.
Once all of this is put together you are ready to petition and file for bankruptcy.
Are you down with mounting debts and thinking of filing a chapter 13 bankruptcy? Chung, Malhas & Mantel, PLLC can hire expert and professional attorneys at law firm in Seattle