People rarely think about filing for bankruptcy until they need this type of service. When debts become overwhelming, it can be difficult to make sense of the bankruptcy options. The following guide will explain what you need to know about getting out of debt by filing for Chapter 7 bankruptcy. But most important, what happens when you file for Chapter 7 Bankruptcy protection.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is a process that relieves unsecured debts. In an affordable Chapter 7 Bankruptcy, the petitioner must turn over their nonexempt assets to a court-appointed trustee. The bankruptcy trustee will liquidate the assets to pay off some or all of the debts owed by the petitioner. A qualified bankruptcy attorney can help you evaluate what assets will be protected and what won’t be. Creditors cannot continue seeking payment for the remaining balances owed to them after the debts have been discharged.
What Happens When You File Chapter 7 Bankruptcy?
If you are wondering what happens when you file Chapter 7 Bankruptcy, then be ready for the following. First, your bankruptcy lawyer will provide you with a specific list of debts that will be discharged in your case. Though you will still have to liable for some debts, such as government or court-ordered fees and fines. Additional debts that cannot be discharged in a Chapter 7 bankruptcy includes the following:
- Fines imposed as penalties
- Spousal and child support payments
- Student loan debts
You may also be responsible for paying personal injury or wrongful death judgments against you.
What Happens to Money After Chapter 7 Bankruptcy?
Generally speaking, all of your income is protected when you file for Chapter 7 bankruptcy. If a death occurs within 180 days of your filing bankruptcy and you are to inherit or receive proceeds, then those funds may need to be turned over to the bankruptcy trustee.