Chapter 7 Bankruptcy Law

When you come right down to it a Chapter 7 bankruptcy provides you relief from nearly all

, if not all, of your debt. It basically offers you a chance to start over with your finances.

The laws and regulations governing Chapter 7 bankruptcy have changed extensively over the past few years. But, the purpose hasn't changed. It exists to assist people who find themselves in a financial situation where they have an overwhelming amount of debt with no likelihood of ever being able to entirely pay that debt off.

To start a bankruptcy, you must file a bankruptcy petition in Federal bankruptcy court. It is highly recommended that you use an attorney to handle this filing for you. After your attorney files your bankruptcy petition, you get instant protection from any action by your debt collectors. That protection is designated an "automatic stay." Effectively, the automatic stay of bankruptcy stops all collection action by your debt collectors. In truth, once you file your bankruptcy petition, your debt collectors are prohibited by federal law from contacting you for payment or from filing any form of collection complaint against you.

As part of your bankruptcy proceeding, you will have to attend a hearing at bankruptcy court. The hearing typically takes place in a room with you, the bankruptcy trustee (i.e., the individual assigned by the court to watch over your case) and your lawyer. The whole process usually only takes about fifteen minutes, at some stage in which the trustee will ask you some questions on the subject of your take-home pay and your debts. At the conclusion of the hearing, the trustee makes a recommendation to the bankruptcy court to discharge your debt. A discharge order is subsequently mailed to you. It may possibly take more than a few months for you to actually receive your discharge order.

Be aware that your lenders can appear at your hearing to speak for their interests and oppose your bankruptcy discharge. But, it's really an extraordinary situation where a creditor actually shows up. In most cases, the bankruptcy is fairly effortlessly accomplished without any protests from creditors.

Bankruptcy may be your only out if you are burdened underneath a sizeable quantity of debt which you have no means to pay off. So, if you are in debt way over your head and are having difficulty making standard payments, you owe it to yourself to at least speak with a bankruptcy attorney about the prospect of filing a Chapter 7 bankruptcy.

by: Harvey L. Cox

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