Considering Filing for Chapter 7 Bankruptcy? What You Need to Know!

10-Sep-2010 There comes a time when debt has simply become too overwhelming and chapter 7 bankruptcy is your best option. Despite common misconception this does not mean you will lose everything.

When you make the decision to file chapter 7 bankruptcy the first gratification will be that all phone calls and debt collection attempts will stop. This happens because once you file everything you have is placed in the control of a trustee. This person handles your assets and any properties in your name.

The action taken by the trustee will be to liquidate your assets and properties and turn them into cash. That person will then be in charge of dispersing that cash to your creditors as well as to you.

It certainly sounds overwhelming to have your valuable assets turned to cash and paid out. However the first priority of the cash garnered from the sale of your assets is covering your living expenses. It is the money that remains after your living expenses that goes to the debt collectors.

Chapter 7 liquidation proceedings even protects some of your properties. These typically include assets associated with or required for your trade and are reserved for your daily use.

It is exemptions like this that make it so important to speak with a chapter 7 bankruptcy attorney before making any decisions. You will need to take a "means test" to identify where your income falls when compared to the state average. Once you pass the test you take the next steps of filing a bankruptcy petition and financial statements in court. After this step you are placed with a trustee and will no longer be inundated with calls from debt collectors.

The proceedings for filing chapter 7 bankruptcy typically take 4-6 months. However as soon as you file all the income you earn and any properties you obtain are yours to keep and cannot be touched by creditors.

Remember to keep yourself informed with the help of a bankruptcy attorney because there are some debts such as child support, student loans, taxes and liens  will still be your responsibility after filing chapter 7 bankruptcy.

Chang and Carlin Disclaimer
The content found on the Chang & Carlin site is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about chapter 7 bankruptcy, chapter 13 bankruptcy, foreclosure services, real estate legal services, you are encouraged to call our law firm at 866-790-8601 or Request a Free Legal Evaluation. Chang and Carlin serves clients in Chicago, Schaumburg, Joliet, Warrenville, Waukegan, Illinois.