Not everyone knows about the benefits of filing for Chapter 7 bankruptcy for individuals and small business owners. Exploring these benefits when you are struggling with debt may help you make the decision that best matches your financial circumstances. Finding out how Chapter 7 bankruptcy works may also help. Feel free to talk to a Chattanooga bankruptcy attorney for further guidance.
Benefits of Chapter 7 Bankruptcy
Filing for Chapter 7 bankruptcy is one of the most common ways people file for bankruptcy. Chapter 7 bankruptcy works by turning all financial assets owned by individuals and small businesses into money that can be divided up amongst creditors. The creditors accept this money as a replacement for the debts that were owed to them.
This process is referred to as the liquidation of all property and other financial assets into full debt repayment. Small businesses often file for Chapter 7 bankruptcy when they are unable to gain access to profits under Chapter 11 bankruptcy. What happens after Chapter 7 bankruptcy is the business closes down while someone else takes over to ensure creditors are paid.
Individuals may or may not qualify for Chapter 7 bankruptcy. This depends on various factors. Either way, there are benefits of Chapter 7 bankruptcy that may help you decide whether this option is best for you. The benefits of Chapter 7 bankruptcy are:
No repossession
No collections
Faster processing
Lower fees
The benefit of filing for Chapter 7 bankruptcy is escaping debt without having to worry about facing legal problems from creditors. Chapter 7 bankruptcy blocks creditors from taking legal actions like repossessing property or collecting money from your account. Certain types of property you own will become exempt from being collected.
Chapter 7 bankruptcy takes about four to six months compared to years under other types of bankruptcy. Lower fees for Chapter 7 bankruptcy range from $15 to $245 depending on different factors of your case.
Who Qualifies for Chapter 7 Bankruptcy?
You might be wondering what it takes to qualify for Chapter 7 bankruptcy. Exploring the Chapter 7 bankruptcy eligibility criteria can help you navigate this process. An individual person, business, corporation, or partnership can file for Chapter 7 bankruptcy. The amount of debt does not determine eligibility, but certain exceptions do.
Those who fail to cooperate with the court and whose bankruptcy petitions were denied in the past 180 days may not file for Chapter 7 bankruptcy. Credit counseling is required within 180 days of filing for bankruptcy. Otherwise, filing for Chapter 7 bankruptcy will be revoked.
Debt discharge is only provided to individuals under Chapter 7 bankruptcy. Not all debts can be discharged. Find out more about what steps this involves from an experienced bankruptcy lawyer.
Call Tom Bible Law for Legal Help
You may not have to deal with debt alone. Do not hesitate to contact us today at Tom Bible Law by dialing (423) 424-3116 for a consultation about your financial situation. Our experienced team of Tennessee bankruptcy lawyers is prepared to help you start taking steps toward filing for Chapter 7 bankruptcy. We are located throughout the Tennessee cities of Chattanooga and Tullahoma.