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Everything You Should Know About Chapter 7 Bankruptcy

Despite your best efforts, you may find yourself having to file for Chapter 7 bankruptcy. These sorts of things can be very confusing, with all the different codes to keep track of. According to Upsolve, one can expect a Chapter 7 bankruptcy to take between four and six months from beginning to end, so it's important to understand what this lengthy process will involve. Here's more about this type of consumer bankruptcy.

What Is Chapter 7 Bankruptcy?

When you hear or read about bankruptcy being discussed, you might see different numbered "Chapters." Chapter 7 bankruptcy is for certain things, like credit card debt, medical bills, rent that is past due, any payday loans, cell phone bills, or mortgage payments. This is why it's referred to as consumer bankruptcy. It can wipe out all of these issues but it doesn't mean that you won't have any obligations.

What Do I Do to File?

The best thing when filing for consumer bankruptcy is to use the services of a bankruptcy lawyer. They can guide you through the entire process and make sure that you have all the appropriate paperwork. Different states may have different requirements, so hiring a lawyer can be key to ensuring the process goes smoothly.

What Is Pre-Filing Debt and Post-Filing Debt?

When you file for Chapter 7 bankruptcy, you can have debts discharged that you had before you petitioned. These are pre-filing debts. Post-filing debts are anything you incurred after the petition, and you'll have to pay those balances. Let's use a medical bill as an example. You might have filed and any bills that you owed before the filing might be stricken. But if you keep using those medical services, you would owe what you were billed after the filing.

People who are struggling badly can use this category to get back on financial footing. While it can help them, it will also affect them for a long time. When one files for consumer bankruptcy, they will have this on their financial record for 10 years. That can affect their ability to do things like buy a house, but the impact of that bankruptcy notice will lessen as time goes by.

Bankruptcy has gotten a negative wrap, but it has helped millions of people get out of a sticky situation. Many people have filed for it and managed to come out on top in the end, so the last resort may be the best one. Are you facing the possibility of Chapter 7 bankruptcy? We're here to help you through the process. Please contact us today for more information.

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