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What is chapter 7 bankruptcy?

On Behalf of | Mar 29, 2019 | Chapter 7 Bankruptcy

Like many Tennessee residents, you may have fallen into personal debt from credit card use, unexpected medical expenses or job loss. When you start to search for ways to get out of debt, you may feel overwhelmed by the numerous options that are available. One such option is chapter 7 bankruptcy. Depending on the unique aspects of your financial situation, chapter 7 may be the right solution to recover from overwhelming debt.

According to the Administrative Office of the U.S. Courts, chapter 7 of the Bankruptcy Code centers on paying creditors through liquidation of assets. One of the potential benefits of filing for chapter 7 is that the petition usually stops ongoing debt collection actions. Before choosing to file for chapter 7, you should understand the qualification requirements. The terms generally state that you must not have filed and then dismissed another bankruptcy petition in the last 180 days. Additionally, you usually must receive credit counseling from an approved source at some point within 180 days before filing.

Once you are ready to file your petition of bankruptcy, you may need to submit specific documents to the court. These required documents may include a list of your assets, proof of your income, details of your expenditures and other descriptions of your financial situation. If you have credit card debt, you may also need to submit proof of credit counseling and a debt repayment plan (if you have one). Another vital document is a schedule of your exempt property (assets that are safe from credit claims). You may need to consult state laws to determine which property is exempt.

While this overview of chapter 7 bankruptcy may provide some helpful information, it should not be interpreted as legal advice.


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