Chapter 7 bankruptcy is feared by many. However, under the right circumstances, it can give those who have committed honest mistakes with their finances a fresh start. If you’ve been hit by too much credit card debt, enormous medical bills, unpaid taxes, or a failing business, then this bankruptcy type could be for you. Also known as liquidating bankruptcy, Chapter 7 can keep your creditors from collecting from you any further once the case is over.
A Chapter 7 bankruptcy case generally lasts from 4 to 6 months. In the filing, all of your assets will be listed along with their garage sale value. You will need to meet with a bankruptcy trustee 5 weeks after filing, where you will be asked questions about your property and financial affairs. Your answers will be held under oath.
If you are truly finding it hard to make your payments to your creditors and have no assets of value to speak of, you should conclude the meeting successfully. After the meeting, your trustee and creditors will have 60 days to counter your bankruptcy claim. If they aren’t able to do so, the court will then issue your discharge, and your case will soon be over and done.
To see if Chapter 7 is a viable option for you, consult a knowledgeable tax lawyer in your area.