Filing Chapter 7
Filing Chapter 7
If you are going to be filing for bankruptcy, you might be, or be forced to
be, filing under Chapter 7. If you are a business, this means that the
business is going to be ceasing operations and having a Chapter 7 Trustee
appointed right away, who will sell all of the assets and distribute the
money to the creditors. It might or might not mean that the people who work
for you will lose their jobs. Sometimes, when a company is sold off, it is
kept intact or partially intact, and business might proceed as usual,
simply with a different person in charge.
Chapter 7 can also be filed by an individual. This is going to mean that
you can keep certain property that is exempt. However, some liens, such as
real estate mortgages, are going to be kept intact. Any assets that are not
exempt are going to be sold off by the trustee in order to pay back the
creditors. This is going to mean that the other types of unsecured debts
that you have will be canceled. Even though most other types of unsecured
debt are canceled, there are some that you are still going to have to be
responsible for. This includes child support, most taxes, most student
loans and any fines or restitutions that you are responsible for regarding
any crime you might have committed.
If you file for bankruptcy, you are going to be able to start again because
most of your debts will have been canceled. Of course, anything that you
have of any value will have been sold, so you are going to have to start
over when it comes to that as well. Another disadvantage is that you are
going to have a record of the bankruptcy on your credit report for 10
years. It might mean that you aren’t able to get loans or other types of
credit, but this effect could happen just as easily with high debts.
There are some things that you should consider before filing for Chapter 7.
There are some cases in which you can avoid being forced to file on the
grounds that it is abusive. You might be able to opt for Chapter 13
instead, which means you can pay off all or some of your debts if you have
more time, and if this happens you won’t have to have your property and
assets sold off.
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