The Disadvantages of Chapter 7 Bankruptcy

If you’re facing a huge mountain of debt and you can’t see over it, and most of those obligations are not due, maybe not due, you may be thinking in terms of bankruptcy. Most consumers think so, but you need to make sure you’re not jumping out of the frying pan into the fire, and there are some bankruptcy facts you need to be aware of so you don’t get into even bigger trouble.

First of all, with recently enacted bankruptcy laws and various changes to those laws, you may not even be able to file for bankruptcy. Whereas in the past anyone could file bankruptcy for almost any reason, new laws now make it more difficult to do so because each case is considered on a case-by-case basis, with the courts deciding whether or not you can file for bankruptcy and, if so. , , which chapter can archive.

The typical consumer would want to file for Chapter 7 bankruptcy, which is the one that, according to common wisdom, wipes out all your debts and walks away with a clean slate. But the reality of this is that it’s not simple, it’s hard to get approved, and no matter how lenient a court feels on any particular day, there are some debts that don’t get discharged.

For example, financial obligations like tax liens, child support, alimony, and federally funded student loans are not eliminated with chapter 7 bankruptcy. So even if you are successful in filing for this chapter, those debts they will remain You should be aware of this because if a significant portion of your debts are made up of this type of debt, bankruptcy will provide very little relief.

The best way to convince the courts to approve you for chapter 7 is through the way you present your current and detailed financial situation. You are not an expert in this area, and for this reason, it is strongly recommended that you use a qualified bankruptcy attorney who knows how to present your financial facts in a way that could tip the courts toward a chapter 7 judgment.

However, one of the things you should consider first is getting a bankruptcy appraisal. This free service from a qualified bankruptcy attorney familiar with federal and state laws can assess your financial situation, advise you of your options and alternatives, and also tell you what you could realistically expect if you go ahead with a filing.

Bankruptcy, today more than ever, is not a DIY process. If you need to fix a leak in your home, don’t call an electrician. By the same token, if you need to know what to do about your financial situation and what options you may have, don’t accept “common wisdom” but turn to experts who are familiar with bankruptcy and will tell you what your options really are. are.