Chapter 7 Bankruptcy Basics

Filed in archive Information About on July 23, 2010

© The-Lane-Team

Chapter 7 Bankruptcy involves a full and complete dissolution of any debt, with the exception of student loans. Student loans can occasionally be dismissed but this is extremely rare. The good news is you can usually suspend payment for student loans during times of financial hardship. This doesn't make them disappear but it keeps you from going into default.

Chapter 7 is a form or personal bankruptcy. It is different from Chapter 13 in the way debt is organized. With a chapter 13 filing you have to make a set payment, for a set amount of years. The payment plan is created with your personal expenses and income taken into consideration. Chapter 7 dissolves debt and means no payments will have to be paid to debtors. The case is resolved and everything in closed and over with after court approval.

Most people who file for Chapter 7 have no assets and no form of income. You can have up to a certain amount of income and up to a certain amount of assets under Chapter 7 without loss. This can sometimes mean being able to keep your home and your car, however the allowances under Chapter 7 are low and your case would have to bre reviewed by a lawyer before this determination can be made.

Most lawyers offer a free consultation for those considering bankruptcy.