It is a simple procedure to become debt-free. In many cases, the delinquent amount is paid and the case is resolved within three to four months of filing. Chapter 7 is less expensive than other Chapters, which is one of the primary reasons to select it. To pay back your creditors, you must liquidate a portion of your assets.
Before registering for Chapter 7 bankruptcy, the debtor must undergo credit counseling. The individual must satisfy the Means Test, which determines eligibility for liquidation bankruptcy. This calculation determines whether you have sufficient funds or assets to repay the debt.
A Creditors' Meeting is convened shortly after filing for Chapter 7 bankruptcy. The meeting notice is distributed to both the debtor and the creditors on the list. The trustee asks the debtor few questions about the information contained in the bankruptcy documents. The purpose of the inquiry is to confirm the accuracy of the information provided. If the trustee wishes to conduct an investigation, he may prolong the Meeting of Creditors or end it on the first day. At this meeting, any creditor may appear and inquire about the debtor's financial situation.
In this form of bankruptcy, you may be discharged from various unsecured debts, including credit cards, personal loans, medical bills, and business debts. This may enable you to keep your home if you have limited assets. The exemption may also be extended to vehicles, furnishings, work equipment, and home appliances. The purpose of such exemptions is to provide a clean slate.
The Automatic Stay is a significant aspect of Chapter 7. After filing for bankruptcy under this chapter, the court will issue an order for an automatic stay. This injunction prohibits creditors from harassing or taking action against you for the collection of debts.
Chapter 7 bankruptcy has the disadvantage of negatively impacting a person's credit score. It brings down the credit score. This bankruptcy will remain on your credit report for approximately ten years. In the near future, it becomes difficult to obtain additional credit due to this reduced credit score. This can be enhanced by making consistent credit payments during this time frame.
The court grants the debtor an absolution upon the expiration of the deadline for creditors to file objections. The discharge prohibits creditors from pursuing collection of the debt. Once you are discharged from Chapter 7 bankruptcy, you are completely free of debt and can begin a new existence.""
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