The law understands that people can get into severe financial difficulties, drowning under a mountain of debt and needing a fresh start. That is what chapter 7 bankruptcy can provide. This isn’t a decision that should be made without careful consideration, but for a great many people bankruptcy has allowed them to continue into a better future.
What is Chapter 7 Bankruptcy?
Chapter 7 is the most common form of bankruptcy, technically known as liquidation bankruptcy. All of the debtor’s non-exempt assets are sold by the bankruptcy trustee and the funds used to pay off creditors. Debts are prioritized with secured debts paid first. Other debts, such as credit cards, are paid next. Chapter 7 is a fairly quick process, typically completing in about three months.
The Automatic Stay
As soon as someone files for bankruptcy protection, an automatic stay comes into effect. Usually, by the time someone considers bankruptcy, they are being hounded ceaselessly by creditors. Debt collectors call constantly and collection letters and threats are received in the mail. An automatic stay means that creditors are no longer allowed to contact the debtor. They cannot call or send letters. If they continue to call, notify your bankruptcy attorney. For most people, the automatic stay allows them to take the first deep breath in a long time and get a good night’s sleep.
One of the most critical parts of a Chapter 7 is designating which assets that the debtor owns are exempt. In other words, the debtor keeps all of their exempt assets. This is when a bankruptcy attorney’s experience becomes very important. Knowing whether a particular asset is exempt or non-exempt decides whether or not the asset will be sold or retained by the debtor. The rules are complicated and the bankruptcy trustee must approve the listing of non-exempt assets. The preferred outcome for debtors is to keep what they own so that they can use it in their debt-free future life.
Hiring a Bankruptcy Attorney
While a automobile accidents is fairly quick compared to other types of bankruptcy, it can become complicated. Bankruptcy laws have been revised many times over the years and the process can seem daunting to someone who has never done it before. An experienced bankruptcy lawyer understands the process and will work hard to ensure that their client has the best possible outcome.
At John Henderson Law in Springfield, MO, you will find the experienced legal assistance you need during this troubling time. A better life is waiting when you’re no longer struggling to make those monthly payments. Take advantage of the protection that is provided by Chapter 7 bankruptcy and get a fresh start. Call 417-866-4505 for a free consultation today.