Chapter 7 bankruptcy is without a doubt the most common form of bankruptcy filed in the U.S. Of the 1 million or so bankruptcies filed throughout 2013, about 730,000 of them were Chapter 7. That’s because this type of bankruptcy allows people to benefit from a completely clean financial slate and a permanent solution to their debt problems.
Still not sure if you’d benefit by filing Chapter 7 bankruptcy? Here are some of the most commonly-asked questions people just like you have about filing the most popular type of bankruptcy, along with their answers:
Q: What is Chapter 7 bankruptcy?
A: In this form of bankruptcy, all of an individual’s applicable debts are discharged and liquidated in exchange for some of the individual’s possessions, assets or property. Certain types of debt, like student loans, aren’t able to be discharged during a Chapter 7 bankruptcy, and this bankruptcy will stay on your credit report for 10 years after you file it. However, no other form of bankruptcy allows your overwhelming levels of debt to be completely forgiven.
Q: How long does Chapter 7 bankruptcy last?
A: On average, it takes anywhere from three to four months for a bankruptcy to be completed and for the filer’s debt to be discharged. For more complex cases or in situations where creditors oppose the bankruptcy, the case will understandably take longer.
Q: Should I hire a Chapter 7 bankruptcy attorney?
A: Yes. While there’s no requirement that says you must hire a Chapter 7 bankruptcy attorney, it’s always highly recommended. Your attorney will ensure that your bankruptcy paperwork is filed correctly, preventing against the possibility of the courts throwing out your case because of a clerical error.
Have even more questions for us about this type of bankruptcy, or about the differences between Chapter 7 vs Chapter 11 bankruptcy? Ask us anything by leaving a comment below. See more.