The Ins and Out of Chapter 7 Bankruptcy  
 by Michael David

The Ins and Out of Chapter 7 Bankruptcy

Learn everything you need to know about chapter 7 bankruptcy.  This article will put the pros and cons of filing chapter 7 bankruptcies into perspective for you.  If you plan to file bankruptcy or considering bankruptcy as an option then you should read this article before making any decisions.

Chapter 7 bankruptcy protection is one way to get out of a financial crisis, but it may not be the most logical choice when considering financial healing. Before involving courts and lawyers closely examine the legal arrangement with the loaner. It is possible you will not be able to file bankruptcy, such items which do not allow you to file bankruptcy are taxes, child support orders, government loans, etc. If you are unsure or unable to determine if your items fall under the bankruptcy protection law then consult a professional finance advisor or attorney.

Some people refer to the bankruptcy system as a liquidation of debts. Here is some current information on chapter 7 bankruptcy protection. The basics on chapter 7 bankruptcy protection is quite simple, you are telling the world you can not pay your bills and you will be giving the courts the permission to liquidate most everything you own. There are some limitations to that, but basically that is it. If you use the Chapter 7 program, your creditors will benefit from the sale of the things that were under your care.

You start your chapter 7 bankruptcy protection at the bankruptcy court in your area with a petition. You will file a sundry amount of other forms also, including copies of your latest tax returns. A husband and wife may file jointly or individually. If filing jointly, the rules are the same as if applying individually. You will need to have your own forms, as the court will not provide them for you. You may download them at http://www.uscourts.gov/bkforms/.  You will be charged a filing fee, an administrative fee, and a surcharge for the trustee. You may get permission from the court to pay these in installments. More than likely you will be asked to provide a list of all creditors and how much you owe, and why. You will be asked to provide the amount, source and pay schedule for your income. You will be asked for a list of all your properties and living expenses.

Because the chapter 7 bankruptcy protection program does not involve a plan of repaying the creditors, it has been subject to abuse. In 2005 the United States Congress made it harder to commit fraud using the Chapter 7 bankruptcy protection allowance. This has resulted in more people using the chapter 13 program. When you use the Chapter 7 program it will be seen on your credit report for ten years.

While your credit may be ruined, you do in effect receive a "fresh start" for your financial activities using this type of program. It is seen by the courts as an incentive to work. You will no longer have to be concerned that a creditor may legally seize your property, because you have been discharged from the load of debt. Therefore you can work again, knowing that what you work for will not be taken away.

This type of bankruptcy protection proceeding is available to individuals, corporations, businesses, and partnerships. A trustee is appointed by the court in all cases to oversee the liquidation of assets. Whether you see bankruptcy protection as an end or as a beginning, it will no doubt be an upheaval of your finances. The banks and sometimes the employers of the world still see it as a black mark. It should be used only for extreme cases of financial hardship.

If you have filed for bankruptcy or are in financial distress then applying for guaranteed credit cards can sometimes help you get back on the road to financial healing.  Dave Ramsey is one of my best financial gurus.  His book titled "Dave Ramsey's Total Money Makeover: A Proven Plan for Financial Fitness" is the excellent financial guide to getting your finances in order and saving money for your future.

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