What is Chapter 7 Bankruptcy?
Bankruptcy is a right provided by Federal law to people in debt who need relief from their creditors and an opportunity to get back on an even financial footing. A decision to file should be made only after determining that bankruptcy is the best way to deal with your financial problems, and this article cannot explain every aspect of the bankruptcy process.
There are two different forms of bankruptcy available to individuals with consumer debts. The first of these is a Chapter 7 – known as a “straight bankruptcy” or liquidation. It is the most frequently chosen type of bankruptcy for individual debtors, as it offers a speedy and inexpensive way to obtain a fresh financial start. Another type of bankruptcy is a Chapter 13 case, call a “debt adjustment.” Chapter 13 bankruptcy will be discussed in greater detail in a future article, but is often used by debtors who have property which they can not exempt or protect in a Chapter 7 case, such as a significant amount of equity in real estate.