Bankruptcy protects you when you cannot pay the money you own to other people. To protect you from such a situation Chapter 7 bankruptcy is introduced. If you don’t know much about bankruptcy or chapter 7 and if you think can debts be discharged by filing for chapter 7 bankruptcy then read this article.
What happens in chapter 7?
Chapter 7 is a type of bankruptcy that a person can apply for is he/she is facing difficulty in paying its debt. In this a trustee is appointed to look and liquidate whatever assets a person has to pay the creditors after the proceeds are exhausted, the remaining debt is discharged. Contact a San Diego bankruptcy lawyer for properly filing a chapter 7 bankruptcy.
The eligibility to file for this is something like this:
- The debtor must have had no Chapter 7 bankruptcy discharged in the preceding eight years.
- The applicant must pass a means test.
How does chapter 7 work?
Firstly the unsecured debt is separated into classes and categories with each class receiving priority for payment. Secured debt is secured by insurance to decrease the hazard related to loans, for example, a home loan.
Unsecured debts need obligations and are paid first. Instances of unbound need obligations are charge obligations, kid backing, and individual injury claims against the indebted person. Next, make sure about obligations are paid. Last is the installment of no priority, debt without collateral with reserves staying from the liquidation of benefits. On the off chance that there are not adequate assets to pay the no priority uncollateralized debt; at that point, the obligations are paid on an ace data basis. Hire a chapter 7 lawyer San Diego for proper filing of bankruptcy.
What are the possible benefits of filing a chapter 7 bankruptcy?
BLC Law Center will tell you what the benefits of filing a chapter 7 bankruptcy are:
Immediate relief: When you file successfully for bankruptcy then your collectors cannot contact you again, you are protected legally by them. This is called an automatic stay.
Debt will be erased: San Diego bankruptcy lawyer will help you in filing bankruptcy which will erase every debt you have on you, like – credit cards, medical, personal loans, law suites, etc. You are not obliged to pay this rent when the bankruptcy discharge is entered by the court. There are certain debts which can’t be erased such as – student loan, certain tax obligations, government judgments or penalties, some housing-related fees, child support, and alimony payments.
Credit score will improve: Erasing their debts through the bankruptcy process gives them a clean slate, which can actually help improve their credit score. Once you receive a discharge, there are multiple ways to start rebuilding your credit including using a secure credit card, being an authorized user on some else’s card, and sticking to a budget.
No garnishment: Once you file for bankruptcy, the automatic stay stops this from happening. In doing so, it can actually improve your income because you actually get to keep the money you earn at work.
Prevent a Water, Gas, or Electricity Shut Off: Because the automatic stay applies to utilities as well, bankruptcy can help you keep your water, gas, and electricity on.
Now, these are only some benefits of filing chapter 7 bankruptcies. To know more about bankruptcy you can contact BLC Law Center and talk to a professional bankruptcy lawyer.