Chapter 7 bankruptcy requires insolvency:

People file for bankruptcy as a last resort to re-organize their messed-up financial lives. However, many of them are jittery with it as a suitable debt relief option. For that reason, debtors need to know about the benefits of filing bankruptcy, in this case chapter 7 bankruptcy in order to relinquish their overwhelming financial liabilities.

Chapter 7 bankruptcy works, but how?

As per the federal Bankruptcy Code, in case of chapter 7 bankruptcy, all or most of your unsecured debts are wiped out. This is done by the court-appointed trustee who analyzes your assets and determines whether or not any one of them can be liquidated so as to meet the obligations of the creditors. This is why it is also referred to as ‘liquidation’ or ‘straight’ bankruptcy.

Advantages of chapter 7 bankruptcy:

You’ll enjoy the following benefits of filing chapter 7 bankruptcy petition:

  1. Prevent wage garnishment – For instance, your creditor has successfully won a wage garnishment lawsuit against you. In such case, he is authorized to withdraw 25% of the funds from your salary account or take away that same amount of money from your check. Moreover, he can lay his hands upon all the other accounts owned by you and even put a lien on your assets. A lien will bar you from selling off the property. Both the wage garnishments and bank levies will worsen your financial health instantly.As a result, you’ll struggle to pay even for petty items and will be unable to meet your daily essential expenses. So, if you file chapter 7 bankruptcy, then it’ll be one of the best ways to stop any sort of wage garnishment against you. However, it will also put an automatic stay on all such proceedings, if the hearings have already started.
  2. Prevent property repossession – As soon as you file bankruptcy and your petition has been accepted by the competent court, all your assets are then protected by the court. Due to this fact, any of your assets will not be repossessed or foreclosed until and unless approved by the bankruptcy court. However, in most of the cases, bankruptcy discharges all those debts that are associated with foreclosed, reposed or returned personal or real estate assets.You shouldn’t make any unwarranted assumptions that once you’ve been granted a discharge from the court on your mortgages or car loans, that you are not liable for the house or the car respectively. In reality, the court can ask you to pay off the deficient amount on the loans after calculating the market value of your assets.
  3. Prevent collection harassment – Falling back on making the monthly payments have a lot of adverse effects. One of them is the collection harassment unleashed by the unforgiving debt collection agencies. So, if the collection agencies are sending you collection letters, calling you up at odd hours of the day, threatening you of dire legal consequences or bothering you at your office, then in that case bankruptcy can put an end to all this horrendous activities.

Finally, do work with an experienced bankruptcy attorney since it involves a lot of complex paperwork and legal terms which may be beyond your comprehension as well as capability.

Should you have any questions, please contact me at 321-445-7474 or law@spacecoastlaw.com and I would be more than happy to discuss your situation with you.

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