4 Facts about Chapter 7 to Know Before You File

Chapter 7 bankruptcy is something you can pursue if you need extreme relief from your debts. If you want to file, you might want to learn a few things before you choose this debt-relief tool. Learning about Chapter 7 can help you know if it is right for you, and here are four facts to know before you file.

1. You Can Keep Exempt Property

The first fact about Chapter 7 is that you risk losing some of your assets. The good news is that you can keep any exempt property you own, and a bankruptcy attorney can explain how this works. If you have some property that you can exempt, the bankruptcy court cannot take it from you. As a result, you might be able to keep your car and house. You will also get to keep most of your personal assets. However, you might lose the cash you have in the bank and your upcoming tax refund check.

2. It Eliminates Unsecured, Qualifying Debts

The next fact about Chapter 7 is that it eliminates any qualifying debts. In most cases, you can request a discharge for all your unsecured debts, such as credit card balances. Your lawyer can help you know what debts a Chapter 7 case will discharge before you file for bankruptcy.

3. You Might Still Owe Some Money

You should also realize that you might still have some debts after filing for Chapter 7. A Chapter 7 case rarely eliminates every debt a person has, and your lawyer can help you understand this before filing. If you owe money on debts that do not qualify for a discharge, you will still owe them after filing your case. IRS tax debt is an example of a debt you might still owe even if you file for Chapter 7.

4. It Is the Faster Branch of Bankruptcy

The last thing to know is that a Chapter 7 case goes relatively quickly. If you file today, you might receive your discharge in just six months. Chapter 7 cases do not typically drag out for months or years. They are faster than other branches of bankruptcy, which is a huge advantage of using Chapter 7.

Knowing these four things can help you determine if Chapter 7 is right for you. If you would like to speak with a bankrupcy lawyer about your situation, contact a bankruptcy law firm today.