Protecting Your Rights And Your Future

What happens when you file for Chapter 7 bankruptcy?

On Behalf of | Nov 20, 2020 | Chapter 7

For some people in Arkansas, filing for bankruptcy is viewed as a personal failure. However, bankruptcy doesn’t have to take a massive emotional toll on your life. It can simply be a way to discharge your debts and start fresh with a clean slate. Here’s a rundown of how Chapter 7 bankruptcy works.

What happens when you file for Chapter 7 bankruptcy?

When you file for personal bankruptcy, you’ll send a petition to the bankruptcy court. The court will appoint a trustee who meets with you to get information about your financial situation. After they’ve gathered information about your debts and assets, they’ll talk to the creditors to figure out how to pay off your debts.

Once the creditors have made an agreement with your trustee, your assets will be liquidated to pay off your debts. At this point, the creditors will no longer be able to contact you. You’ll be able to discharge most, if not all, of your debts and start over.

For business owners, filing for bankruptcy can be a difficult decision. If you’re drowning in debt, you might have to close your business, sell off your assets and start over again. It’s not always easy, but if your business isn’t making a profit, it might be better to shut it down instead of spending the next few years delaying the inevitable.

When should you hire an attorney to help you with filing for bankruptcy?

Without an attorney, you might save a little money on legal fees, but you could also discover that the bankruptcy process is more challenging than you first realized. If you need help, an attorney may help you make smart financial decisions for your situation. The attorney may also help you figure out if you should file for Chapter 7 or Chapter 13.