subject: Filing Chapter 7 Bankruptcy Can Mean A Fresh Start [print this page] No one ever plans on filing Chapter 7 bankruptcy, but there may come a time when it is just unavoidable for you. There are many different situations that may bring a person to the point of having to declare bankruptcy. For some it is a having a downturn in their finances that they are just unable to recover from. For others it may be the result of having huge medical bills due to not having insurance. And yet others come to that point through sheer mismanagement of their finances.
The decision to file Chapter 7 bankruptcy will come easier to some people than to others. For those who do not have many assets or own very little, it may be a simple decision. But for someone who has more complicated finances and has things like a car or a house, it may be more difficult. Whatever your reason, you need to understand that taking this step is not a quick fix. If you are not able to avoid what brought you to this point in the first place, you are bound to end up here again.
Once you have made the decision regarding filing Chapter 7 bankruptcy, you may still have to undergo a means test to determine if you are actually eligible to file. This test uses your income and assets to determine if you are eligible for Chapter 7 or if you must file Chapter 13.
If you are deemed eligible for Chapter seven, you will need to compile a list of all your creditors and what you owe them. You will also need to supply information on your income and where it comes from, as well as lists of your property and of your monthly expenses. Once you file, your creditors are no longer able to contact you to collect your debt, except in certain circumstances.
You will then be part of a 341 hearing in which you may be asked questions under oath regarding your debts and property. Creditors are also allowed to be present to question you, but that does not happen too frequently. The creditors are then given 60 days following the 341 hearing to convince the bankruptcy court why you should not be allowed to abandon your debt.
Once the 60 days have passed without having any creditors objecting, the court will enter an order to discharge all debts that are part of your bankruptcy filing. As part of this process, you will also have to undergo credit counseling and a budget analysis. You are also prohibited from filing Chapter 7 bankruptcy again for eight years after discharge from a previous bankruptcy.
The decision to file for bankruptcy should never be taken lightly. You do not want to find yourself in the same circumstances or worse and not be able to file then because of the wait times. But, if you approach this right and make changes, filing Chapter 7 bankruptcy can mean a fresh start for your financial situation.
