Top Three Bankruptcy Questions Answered About Chapter 7

Top Three Bankruptcy Questions Answered About Chapter 7 "It is estimated that over 1.5 million Americans will file for bankruptcy in the United States this year alone. With pessimistic forecasts for economic improvement, record unemployment, and the housing crisis, personal bankruptcy has become the new ""normal."" With all of this unpredictability and turmoil, many individuals contemplating bankruptcy want answers to a few questions before deciding whether or not it is the best option.One of the first questions asked about bankruptcy is, ""How can it help me?"" Depending on an individual's personal financial situation, the answer to this query can be quite complicated. In a nutshell, Chapter 7 bankruptcy will eliminate credit card debt as well as other unsecured debts, such as medical bills, payday and personal loans, wage garnishments, judgments, deficiencies on repossessed vehicles or foreclosed residences, and some old tax debts. In addition, Chapter 7 bankruptcy may discharge other unsecured debts, which are debts that are not secured by any item or property. In addition, once the bankruptcy petition is submitted, the automatic stay will go into effect, halting all collection attempts by creditors, including phone calls, lawsuits, wage garnishments, and even a temporary halt to a foreclosure.Another frequent query is whether or not one's credit will be affected by bankruptcy. This query is relatively simple to answer. Essentially, pursuing bankruptcy will not destroy a person's credit score because, by the time they need to file bankruptcy, their credit is already severely damaged. They may already be in foreclosure, be several months behind on rent, or be evicted. Due to delinquent accounts, they may be subject to repossession or legal action by creditors. When a person reaches this stage in their finances and is unable to pay any bills and is so far behind on their credit cards, their credit is already in a terrible state. After filing for bankruptcy, the individual can promptly begin repairing and rebuilding their credit. It is a slow process, but the debtor can recover and once again use credit cards and finance items like a car or a house.This then leads to the final query frequently asked by those contemplating bankruptcy. Will I ever again receive credit? That is a resounding affirmative. The good news is that creditors will offer credit to these same individuals post-bankruptcy because they are a safe risk, as the majority of individuals emerging from Chapter 7 bankruptcy are debt-free or nearly so. Offers for credit begin arriving in the mail shortly after a person is released. The debtor must avoid squandering and falling back into the same financial situation that led to their bankruptcy. The advantages of filing Chapter 7 bankruptcy significantly outweigh any disadvantages, such as a 10-year mark on one's credit report. The greatest advantage is that the individual will ultimately be on the path to financial independence.
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