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Chapter 7 bankruptcy: What’s in it for me?

Posted by on Feb 10, 2016 in Bankruptcy | 0 comments

For those whose financial status is in great disarray, one way to get back on track is through filing for bankruptcy. But no matter how practical, achievable, and logical filing for a bankruptcy is to most circumstances, many are still reluctant in taking this step due to one thing: stigma. Many people still tend to think that someone who filed for bankruptcy was someone who has been irresponsible with his finances. Although this could be true to some, most people are wedged in financial trouble due to many different reasons that they cannot control: sickness, lay-offs, death in the family, divorce.

Depending on your circumstances, there are different types of bankruptcy that can meet your specific needs. For those with no stable income or whose income is below the average, a Chapter 7 bankruptcy would be the best option to get out of debt. With Chapter 7 bankruptcy, an applicant might be able to discharge or “wipe out” certain types of debts, usually the unsecured ones (debts that creditors don’t have a lien on).

According to the website of Raleigh Chapter 7 bankruptcy lawyers at the Bradford Law Offices, PLLC, credit card charges are the most common type of unsecured debt that a Chapter 7 bankruptcy may take care of. Personal loans from family and friends, medical bills, and utility bills are also usually discharged. Penalties arising from auto accidents may also be wiped off, unless it was a result of DUI. In some cases, dishonored checks are also discharged, as long as it is not related to fraud.

One limitation of Chapter 7 bankruptcy, however, is that it cannot protect you from secured debts, or debts with lien. So, filing for Chapter 7 usually will not prevent creditors from repossessing your home, your car, or any of your property used to secure a loan. Also, debts acquired after filing may not be covered by Chapter 7 filing, even if they are unsecured.

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