Bankruptcy is a legal process that allows an individual to reduce or eliminate their debts. Through bankruptcy, a person can unburden their financial load and emerge with more stable footing on their economic situation. There are different types of bankruptcy available to individual debtors, and before committing to one it may be advisable to consult with an Illinois-based bankruptcy attorney for case-specific help.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is one of the two common forms of personal bankruptcy available to some debtors. It is often called liquidation bankruptcy because it involves the sale of some of a debtor’s property in order to pay off their creditors. Although it may sound like a stark process, exemptions and other protections allow debtors to keep enough of their property to live their lives once their bankruptcy proceedings end.
Who qualifies for Chapter 7 bankruptcy?
Individuals who wish to use Chapter 7 bankruptcy to take control of their debts must meet certain criteria. For example, individuals who make enough money to pay off some or all of their creditors without liquidation may not qualify for the process. They may have options to pursue Chapter 13 bankruptcy.
Additionally, individuals who have filed for bankruptcy in the past may be barred from filing for Chapter 7 bankruptcy if their prior bankruptcy happened too soon in the past. They may need to wait longer before the are eligible. Other grounds on which Chapter 7 bankruptcy claims can be denied can include fraud, a recent bankruptcy dismissal, or the failure to complete a legal requirement of the process.
Before starting a bankruptcy proceeding, an individual can seek legal help. This post does not provide any legal counsel to its readers. Individual guidance can help readers make good choices about how to address their own debt situations.