Chapter 7 bankruptcy eliminates most types of debt and provides you with a fresh start. Although Congress recently amended the bankruptcy laws to make it tougher to qualify for this type of relief, most debtors contemplating bankruptcy are still able to get a fresh start by filing a chapter 7.
Upon filing a chapter 7, your creditors will receive notice of your case and immediately cease all collections activities. A bankruptcy trustee is assigned to your case to determine whether any of your assets are subject to liquidation. You will be required to attend one hearing with the Trustee to answer questions under oath. Two months after the hearing, the judge enters an order discharging all debts that are dischargeable and closes your case.
The main types of debts that are not eliminated in a chapter 7 bankruptcy are student loans, government fines, domestic support obligations and some taxes.
Although the process appears simple, the issues involved in chapter 7 bankruptcy can be very confusing. Since the changes to the bankruptcy law became effective, it is more important than ever to seek advice from a competent attorney to avoid the pitfalls of the federal bankruptcy code. An attorney will analyze your eligibility for relief under chapter 7, advise you as to whether any of your assets will be subject to liquidation and determine whether any of your recent financial transactions could create problems with your case. In many cases the careful timing of your case can save thousands of dollars. After your case is filed, an experienced attorney will deal with your creditors, the bankruptcy trustee and the government attorneys who review bankruptcy cases.
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