What Does It Mean To Get a Chapter 7 Bankruptcy?

The prospect of declaring bankruptcy is, for many people, frightening, and some people see it as a major failure. However, for many people, declaring bankruptcy, and especially Chapter 7 bankruptcy, can be an essential step to helping them get a fresh start on their financial futures. So what does it mean to get a Chapter 7 bankruptcy, and how could it potentially benefit you?

What is Chapter 7 Bankruptcy?

In simple terms, chapter 7 bankruptcy (also known as a “liquidation bankruptcy”) is a type of bankruptcy where someone sells off their assets to cover their debts, under the supervision of a court. However, this does not mean you will be entirely destitute, as a certain amount of your property is protected by law from being sold or seized. Regardless of how much of their debt they are able to pay off, all or most of their debts will be discharged at the end of the bankruptcy process.

    What Are the Benefits to Chapter 7 Bankruptcy?

In the short term, the biggest benefit to declaring chapter 7 bankruptcy is that you will be able to avoid having your property seized by creditors, since any seizures will first need to go through the bankruptcy court. By the same token, it can also keep you from being foreclosed on or evicted from your home. In the longer term, it discharges all or most of your debt, meaning you no longer need to worry about paying back those debts.

Who Can File for Chapter 7 Bankruptcy?

In theory, a liquidation bankruptcy is available to any person or business suffering from severe financial distress, which is dependent on both the amount of income they have and how much debt they are dealing with. In addition, anyone who had their debt discharged under a liquidation bankruptcy within the past eight years (or a Chapter 13 bankruptcy within the past six years) would not be eligible. Provided you meet these criteria, however, you will generally be considered eligible to declare Chapter 7.

Is Chapter 7 Bankruptcy Right For Me?

Whether or not this type of bankruptcy will be right for you depends on your personal economic circumstances. The only way to be sure is to speak to a bankruptcy lawyer, who can speak to you about your options and help you to come up with a plan that best suits your needs. You do not need to struggle under the weight of overwhelming debt, and bankruptcy may give you the tools you need to start your financial life over again.

Bankruptcy is a complicated and stressful process, and one you shouldn’t attempt to undertake on your own. If you are in severe financial distress and considering bankruptcy, call the bankruptcy attorneys at McGuire, Pelaez & Bennett at 631-348-1702, or visit our contact page. Our offices are conveniently located in Central Islip, right here on Long Island. Our bankruptcy attorneys will work with you to ensure the best possible outcome for you and your family, and make sure that you gain the maximum possible benefit from bankruptcy protection.