A chapter 7 bankruptcy can help people get a fresh start when their debts have become too much to handle. While it can provide relief, it also requires the individual to file specific documents with the court and subjects the filer to comply with certain stipulations. This is why it’s important to look at the benefits and the disadvantages of filing for chapter 7 bankruptcy ahead of submitting your petition to the court.
What Do I Need for a Successful Chapter 7 Bankruptcy Filing?
Many people seek out expert bankruptcy legal services Bend OR, simply because there’s so much involved in filing for bankruptcy. In addition to your petition, you must also submit documents that establish your assets and liabilities, a schedule showing your income and expenses, evidence of your executory contracts and unexpired leases, and a statement that declares your current financial situation.
At the time you file, your tax returns must be up to date. You will be required to show proof of your most recent tax return filing and you will be required to file during the course of the bankruptcy process.
Additionally, the court will likely ask for more evidence regarding your financial situation. For instance, many bankruptcy courts require you to attend credit counseling, prior to filing for bankruptcy. As proof, they will want to see the certificate that shows you completed the course and they will want to see the debt repayment plan you developed. If you expect an increase in either your income or your debts during the bankruptcy process, the court will also expect to be made aware of those changes.
What Can a Chapter 7 Bankruptcy Do for You?
Although a bankruptcy of this nature will negatively impact your credit rating, it’s a far better situation than remaining in debt. Both situations harm your credit, but the bankruptcy will be cleared from your credit history after 10 years. Additionally, the process takes only up six months, so there isn’t a long wait for relief.
Depending on your specific situation, you will likely get to keep most of your property and possessions. While the court may require you to sell off luxury items to help offset your debts, the ost property will be protected. Additionally, you will get to keep any earnings you make and any property you buy after the bankruptcy has been filed. You’ll likely be able to qualify for a line of credit from your lender as soon as one to three years after the bankruptcy filing. Just be prepared to pay higher interest.
Filing a chapter 7 bankruptcy can give you the fresh start you need, but it’s no simple process. The courts want to make sure this is your last resort and you take your financial obligations seriously. For that reason, they require a great deal of documentation and compel you to participate in programs, such as credit counseling. While this may seem like a last act of desperation to you, it can be a beneficial way to start fresh and to help you develop a solid credit profile.