A chapter 7 is the most common remedy for folks struggling and saddled with debts of all kinds both secured and unsecured. The US Bankruptcy Code offers several choices for this purpose.
A Chapter 7 bankruptcy is the most common form and preferred option for most debtors. We have found many reasons but the most common reasons are the following and why.
Limited Time: a typical Chapter 7 bankruptcy takes about 80-100 days from beginning to end. Once the case is filed, a brief creditor’s meeting is held about 30 days into the process. Unless a creditor objects (rare), the case ends about two months later with little excitement. Generally speaking, creditors never shows up. They have no hope of getting any money from this debtor and why to waste time in pursuing a wild goose chase.
Property: Most Chapter 7 filers do not lose any property and they can reaffirm, surrender, or just abandon it. Federal and/or State exemption laws allow a debtor to protect fairly generous amounts of property. In Nevada, please see my article about Nevada exemptions where a fair amount of property can be saved. The bankruptcy trustee concludes most cases as being “no asset” cases. This means that you have no property that you are required to forfeit.
Affordable Cost: Considerably less expensive than a Chapter 13 bankruptcy. While there are regional differences on what a typical bankruptcy lawyer charges, most experienced lawyers will quote a fee that is fair and affordable.
Repayment of most unsecured creditors: none. If the debt was incurred in good faith and no creditor objects to you filing bankruptcy, unsecured credit obligations (credit cards, medical bills, utility bills, car repossession, mortgage foreclosure obligations) are completely wiped out in bankruptcy.
Privacy: While a record of your bankruptcy is accessible in the court system, unless you are famous, you don’t have to worry about it being published in the newspaper. Generally, the only people who know you filed are you, the court, your creditors, and anyone else you choose to tell.
Credit: Most Chapter 7 bankruptcy filers are able to reestablish credit within a short period after their bankruptcy. After the present debt is removed, your debt to income ratio improves. This is the beginning to rebuilding credit.
Stress: Other than a 3-5 minute hearing with the assigned trustee for your case, most Chapter 7 filers never have to go to court.
Nothing to be embarrassed by filing chapter 7. It is a remedy provided under the federal laws and famous people had filed bankruptcy in the past.