Bankruptcy Lawyer in Citrus Heights

What is Chapter 7 Bankruptcy?

Posted on August 1, 2017 · Posted in Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common bankruptcy in the United States for both business and personal bankruptcy. Chapter 7 bankruptcy also known as “Liquidation Bankruptcy” is a legal proceeding which involves discharge of personal debt after liquidation of certain eligible assets that you may own. However, certain property is exempt from liquidation.

After the liquidation sale, the proceeds of the sale will be used to pay creditors. Under Chapters 7 Bankruptcy practically all debt will be eliminated. The creditors will no longer be able to contact you in an attempt to collect any debt that was discharged in the process of the Chapter 7 bankruptcy. However, some debt cannot be discharged for the reasons of keeping good public policy. Debt such as child support, income taxes, federally granted student loans (private student loans are dischargeable, for example, Sallie Mae), fines and restitution for criminal conduct, are some example of non-dischargeable debt.

Chapter 7 bankruptcy will stay on the filers individual credit report for 10 years from the date of filing of the petition with the district court. During these 10 years, it may be harder for the individual to get reasonable terms of credit, although high and bad debt can have the identical effect if not worse. The ability to predict future creditworthiness is difficult, however removal of debt usually improves creditworthiness both in the short and long-term.

If you have fallen behind on your bills and are being harassed by creditors contact a bankruptcy lawyer at Conlong & Fong today. Call (916) 971-8880 to see if you qualify to file bankruptcy and get a new fresh start.