| Advantages and disadvantages of Chapter 7
Chapter Seven bankruptcy has many advantages that you should consider if you're in financial distress. Otherwise known as 'liquidation,' Chapter Seven bankruptcy allows you to wipe out most of your debt and begin to establish a good credit rating.
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| Are employers notified?
Chapter Seven bankruptcy is a matter of public record, which means the information is accessible to anyone, including employers. However, employers aren't automatically notified when a Chapter Seven is filed, unless your employer is a creditor or the court needs information about you that only your employer can provide.
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| Can property be kept?
When an individual files a Chapter Seven bankruptcy petition, nearly all of his or her property is sold by a bankruptcy trustee, and the proceeds are distributed among creditors.
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| Can student loans be included?
Student loans have always been included in the category of debts that generally couldn't be discharged in Chapter Seven bankruptcy. However, there were some exceptions, such as if payments on the loans first became due at least seven years prior to a planned filing, or if you could show the court that it would be 'undue hardship' for you to repay them.
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| Can taxes be included?
Filing for Chapter Seven liquidation puts into effect something called an 'automatic stay,' which immediately stops creditors from trying to collect what you owe them.
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| Chapter 7: can employers discriminate?
All federal, state, and local governmental agencies are prohibited from discriminating against you because you've filed for Chapter Seven. This includes firing you, denying or terminating your public benefits, excluding you from public housing, refusing to renew your state liquor license, excluding you from a state home mortgage finance program, denying you a driver's license, denying you a government contract, or excluding you from participating in a government-guaranteed student loan program.
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| Do both spouses file Chapter 7?
The bankruptcy code allows spouses to file a joint case with a single petition in Chapter Seven, or a spouse may file separately. Whether or not both spouses should file depends on what type of debts they have and when they were incurred.
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| How will filing bankruptcy affect my credit?
Filing Chapter Seven bankruptcy will most likely have long-term consequences regarding your credit. First, the fact that you filed will remain on your consumer credit report for up to ten years, and it's one of the most detrimental entries you can have from a creditor's point of view.
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| How will lawsuits be affected?
The minute you've filed for Chapter Seven bankruptcy, the court imposes what is known as an 'automatic stay,' which is in effect until your case is confirmed or discharged.
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| Paying a particular creditor after bankruptcy
Filing Chapter Seven requires you to list all debts. You legally aren't allowed to pay a favored creditor, such as a relative or friend, and then file for bankruptcy within 90 days.
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| What are the most common reasons for Chapter 7 bankruptcy?
By filing Chapter Seven bankruptcy, you can wipe out most of your debt and begin to establish a good credit rating. The most common reasons for filing include severely over-extended credit, marital difficulties, huge medical fees, unemployment, or any massive unexpected expense.
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| What debts do I have to pay?
Although filing Chapter Seven bankruptcy immediately imposes an 'automatic stay' on most of your debts, there are some that are called 'nondischargeable,' meaning that you'll have to pay them.
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| What debts survive bankruptcy?
Filing Chapter Seven does not automatically erase all your debts. Keep in mind that the debts that are erased are only those incurred before you file; any debt you incur after filing is fair game for creditors.
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| What happens to debts?
At the time you file a Chapter Seven petition for personal bankruptcy, what is known as an 'automatic stay' goes into effect, and you're immediately discharged from paying on all debts, except those that the Bankruptcy Code states are non-dischargeable.
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| What is Chapter 7 bankruptcy?
Chapter Seven, also known as 'straight' bankruptcy, is a legal process whereby an individual's property is sold by a bankruptcy trustee, and the money from the sale is distributed among creditors to pay off debts.
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| What is straight bankruptcy?
'Straight' bankruptcy is another name for Chapter Seven bankruptcy. It's probably the most people think of when discussing individual bankruptcy. 'Chapter Seven' refers to one of the four sections of the federal bankruptcy code, by which an individual or company may get relief from debt.
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| Who can file a Chapter 7 bankruptcy petition?
An individual who files a voluntary Chapter Seven bankruptcy petition must, first of all, either have a 'domicile ' (DAHM-uh-syle) in the U-S-- that is, a place of official or legal residence-- have a place of business in the U-S, or own property in the U-S.
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| Will bankruptcy affect utility service?
Filing for Chapter Seven bankruptcy immediately imposes what is called an 'automatic stay' on creditors attempting to collect what you owe them. If you're behind on a utility bill, and the company is threatening to disconnect your service, the stay will prevent disconnection for at least 20 days.
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