Chapter 7 bankruptcy offers hope to people across the country who are experiencing financial difficulties. It is one of the most popular forms of bankruptcies because, in the majority of cases, it results in the clearing of all debt. In addition to this, it is possible to complete the entire bankruptcy process in a matter of months, making it the fastest way to file for bankruptcy.
However, many people are hesitant to file for Chapter 7 bankruptcy because they believe that they will lose all of their assets and come out of the process penniless. If you are experiencing these concerns, you should read on.
How does Chapter 7 bankruptcy work?
Chapter 7 bankruptcy is often referred to as liquidation bankruptcy. This essentially means that the assets you own will be liquidated to raise the funds needed to pay off your debts. Any outstanding debts will likely be wiped out through a debt discharge.
What are bankruptcy exemptions?
Of course, it would not be viable to liquidate 100% of the assets you own. This is where bankruptcy exemptions come in. As a debtor filing for Chapter 7 bankruptcy, you will be able to benefit from a variety of exemptions, including homestead exemptions, car and automobile exemptions and exemptions for personal property. This will allow you to maintain the necessities you need to have a good quality of life after the bankruptcy is finalized.
If you are going through financial difficulties, you must take the time to understand your options. If you are considering Chapter 7 bankruptcy, you should first learn whether you are eligible.