About Declaring Chapter 7

Many people are forced into filing a Chapter 7 bankruptcy due to job loss or illness. Their debts can begin adding up and they have no way to ever pay them back especially in the case of a chronic illness. However, you should know what you are getting into before you file and truly make sure it is the only option you have.

What Happens in a Chapter 7 Bankruptcy?

First, a Chapter 7 bankruptcy is designed to wipe out all of your unsecured debts. This includes hospital bills, credit card bills, and anything else that does not have collateral against it. However, if you have student loans, you cannot file bankruptcy on these. Your best is to consolidate them and put them into a forbearance due to financial hardship.

If you own a home or a vehicle, this need to be current on their payments, otherwise, you could lose them in a repossession or foreclosure even if you file Chapter 7. The only bankruptcy that can save your home or vehicles is it you file Chapter 13, which is a repayment option. With a Chapter 7, you are not repaying your creditors, you are wiping the slate clean.

What Happens After Filing Chapter 7 Bankruptcy?

After you hire an attorney and the paperwork has been filed, your creditors will be notified of the bankruptcy. You will attend a 341 Meeting of the Creditors before the bankruptcy judge. During this meeting any of your creditors can show up and oppose, but most never do especially in the case with credit card or hospital bills. Approximately 60 days after this 341 meeting, if no creditors object, your debts will be dismissed and discharged. A bankruptcy will remain on your credit for 10 years from the date of discharge.