After Chapter 7 Bankruptcy

After chapter 7 bankruptcy, a person can breathe a little more freely as a tremendous amount of debts can be absolved that before were impossible to get out from under. Chapter 7 bankruptcy is a legal action by which a person's financial assets are liquidated in order to cover the individual's outstanding debts. The funds are most often entrusted with a trustee, who manages the funds during the time an individual is unable to pay. Those who are at risk for having to deal with the results after Chapter 7 bankruptcy should be aware of the fact that there are alternatives. A person does not necessarily have to take such drastic measures in order to pay off debts, and could benefit if a few simple tips are kept in mind.

There are hundreds of people on a regular basis who face bankruptcy due to unexpected finances, the loss of a job with a steady income, inadequate funds to keep up with necessary bills, or a combination. In other words, there many reasons for how and why a person might find themselves trapped in a seemingly impossible situation with nowhere to turn for relief. Wise decision making and planning is important early on in a person's financial dealings in order to avoid falling into a dismal situation, or at the very least, to help the situation to refrain from becoming dire. Good financial planning is vital to a secure future, but unfortunately not everyone has access to, or the knowledge to prevent unpleasant occurrences. Those who find themselves facing life after chapter 7 bankruptcy should not despair as there will still be ways in which they can rebuild and get out from under oppressive debt, "Be of good courage, and he shall strengthen your heart, all ye that hope in the LORD" (Psalm 31:24).

People affiliated with businesses, such as business owners, or organizations could choose to hold out in the hopes that they will be able to break even without having to liquidate any holdings. There are several different chapters and codes of law that relate to bankruptcy and the different aspects and details. After chapter 7 bankruptcy can unfortunately be one of a person's only solutions to an overwhelming amount of debt. Those who are in the business realm and choose to remain in the current position they are in should take the steps necessary towards the filing of a petition under the Bankruptcy Code chapter 11. Chapter 11 spells out the ways in which a debtor can either extend the deadline for payment or in the very least reduce some of the debt. Another alternative occurs if a person's case falls under chapter 13 of the Bankruptcy Code. The aspect of chapter 13 that serves to set it apart from all the rest is that a person will most likely be able to refrain from having to lose a home to foreclosure. This is made possible due to the code's allowance for a period of allotted time during which a debtor is allowed to do what is necessary to catch up on back payments.

After chapter 7 bankruptcy has been filed is a time that should be taken seriously as the action can have serious effects on a person's credit history and be a black mark that could follow them for many years. After alternatives have been sought and no plans prove successful, the petition for filing as bankrupt should begin. There are several pieces of evidence a person must present in a court of law as evidence that the only course of action left to them is such a particular one.

The pieces of evidence that are required consist of a document or documents that officially state a person's current income is insufficient to pay of the amount of debt, secondly, official documentation of current assets and any holdings, and several other documents such as those pertaining to the financial history of the debtor. A petition can be filed jointly, such as a husband and wife, or separately, just as long as all the evidence provides all the necessary information of all included, such as proof of income, spending history and habits, and so on. People who wish to proceed with such actions should be aware that there are additional costs as the court system charges multiple fees for various tasks, such as the filing of reports and administrative work that are sometimes only realized after chapter 7 bankruptcy.

Rules can vary slightly for those who desire to absolve all debt, versus those who require partial relief. Complete elimination of all debt would require a person to not only file with chapter 7 but have the petition converted to one covered under chapters 11, 12, or 13 as well, since various rules apply to different situations. After chapter 7 bankruptcy, a trustee has the job of handling all of a debtors liquidated assets. The trustee is responsible for reselling all properties, or for debtors who had a business, the trustee can be required to run whatever business for a set amount of time in an effort to generate more funds to help pay off the outstanding debts.

Once a person has finally come to the end of the process they can begin to work on rebuilding credit. The process might slow but several years after chapter 7 bankruptcy a person can enjoy the amount of freedom that comes when tremendous debts are lifted off shoulders and the future can be looked to as being full of opportunity, and hopefully, wise monetary planning to avoid ever falling in such debt again.

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