Falling Deeper in Debt? 4 Things You Should Know About Chapter 7 Bankruptcy
If you've reached the end of your rope, and you're drowning in debt, it may be time to consider Chapter 7 bankruptcy protection. While bankruptcy will stay on your credit report for up to 10 years, it's a good way to get out from under debt and give yourself the fresh start you need. One of the benefits of bankruptcy is that you can start rebuilding your credit as soon as your case is discharged. Once your bankruptcy is off your credit report, you'll have the firm financial foundation you need to move forward with your life. Before you file for bankruptcy protection, here are four things you need to know.
Your Case Can Be Rejected
When filing for bankruptcy protection, it's important for you to know that your case can be rejected. While this doesn't happen often, it is still a possibility that you need to be aware of. Some of the reasons your bankruptcy can be rejected include:
- Providing false information on your bankruptcy paperwork
- Failing to disclose all your assets
- Hiding assets to prevent liquidation
Creditors Must Stop Collection Attempts
If you've got creditors hounding you day and night, you'll be glad to know that you'll get a break once you file for bankruptcy. As soon as you file for bankruptcy, your creditors will be notified. At that point, they will be required to stop all collection attempts. If they continue to contact you or anyone else concerning your debt, you should contact your attorney as soon as possible.
Not All Your Debt Can Be Discharged
Chapter 7 bankruptcy allows you to get out from under your debt. However, not all debt is dischargeable. That means, some of your debt may remain active – and collectible – even after your bankruptcy is discharged. Some of the debt that is not dischargeable includes the following.
- Child support
- Alimony
- Most student loans
You Can Choose to Retain Some Debt
If you're concerned about losing your house, or your cars, you might not need to. If you want to keep some of your debt – such as houses or cars – you can request to retain those specific accounts. You'll need to enter into an agreement with those creditors prior to the discharge of the bankruptcy. It's important to note that if you fall behind on those payments after discharge, your creditors will be able to proceed with repossession and foreclosure.
If you're in debt, and there's no end in sight, it's time to talk to an attorney, such as those at John G Rhyne Attorney At Law, about Chapter 7 bankruptcy.