Drowning in debt is no way to live life. You were treading water for a while, but now you finally give up. You can no longer keep up with the mounting bills, late fees and rising interest rates. You finally decide that bankruptcy is the only way to escape this vicious cycle – and the harassing calls from collectors. However, you aren’t sure what happens during the process. If you choose to file under Chapter 7, take a look a what you might expect.
What Does Chapter 7 Bankruptcy Do?
For individuals seeking relief from debt, there are usually two ways to go about getting it: Chapter 13 or Chapter 7. Bankruptcy under either chapter stops all collection activity. Once your chapter 7 lawyer Orlando FL files your petition with the court, a notice goes to all creditors listed in the petition. This immediately puts an end to the harassing activity. A judge will assign a trustee to go through your debts and assets and determine how much you can afford to pay. Once these things are sorted out, the trustee will start negotiating with creditors to pay them.
Can the Court Take Things?
Under Chapter 7, assets are ranked, and the trustee determines whether they should be liquidated to pay debt. Some assets may be safe, like a primary home or vehicle, while others, like investment property, may be taken and sold. While the court doesn’t necessarily seize these items, the trustee will make selling them a requirement for fulfilling your end of the bankruptcy process.
Will the Debt Return?
Once you go through bankruptcy, any lingering debt is discharged. This means that even if you couldn’t afford to pay it all back, it gets wiped away. For example, you may start bankruptcy $75,000 in debt but can only pay $35,000. The remaining $40,000 is deleted. Unpaid creditors cannot come back to try and get what you owe them.
You may want to speak to someone in your area who can help you decide on bankruptcy.