There are primarily two ways for an individual to file for bankruptcy, Chapter 7 and 13. According to Chapter 7, a person may keep a certain part of his property together with most liens, like real estate mortgages. If the person has other assets then these are sold off by the interim trustee to pay off the creditors. However, in any US city like Los Angeles and San Diego there are numerous unsecured debts which get cancelled if Chapter 7 is filed.
There is one major disadvantage of filing Chapter 7. A record of it stays for 10 years on the debtor’s credit report. This practically makes the debtor less eligible to get any further credit for the next 10 years and/or the terms of credits available would be less friendly. This can only be improved once the actual debt is removed from the debtor’s record, which in turn would also improve his creditworthiness.
Things You Must Know About The Chapter 7 Law
There are various things an individual or a company can do for debt consolidation – one of the way-out is declaration of bankruptcy. When in deep debt, one should consider the clauses given in the chapter 7 of the United States Code.
Bankruptcy is a court proceeding in which a debtor declares his inability to repay the creditors. A trustee is appointed to liquidate his assets and pay off the creditors.
Do you own property in San Diego? Are you aware about the concept of filing for bankruptcies and foreclosures? First of all, let us take up the term, “bankruptcy.” You have bought a property by taking a loan from a bank or from a lender.
Going through a Chapter 7 bankruptcy can be emotionally draining, and often confusing. It does not have to be so bad, though, if you simply make sure to follow some guidelines. You obviously would not be considering Chapter 7 bankruptcy if you did not feel like you were in some deep financial trouble that could damage your family and well-being. When you are in this kind of situation, it is good to take a few deep breaths and tell yourself that you are not alone, and that you can get through this with your sanity intact. Following some basic guidelines can help you through the process.
In the future, the chances of being eligible for any type of credit is mainly dependent on the creditworthiness of a person.
Creditworthiness and the possibility of getting a Chapter 7 discharge are some of the numerous issues to consider for determining whether to file bankruptcy. Sometimes the effects of bankruptcy on a person’s creditworthiness is given high importance. In reality, by the time a debtor is ready to file for bankruptcy, his credit score is already destroyed.
In numerous US cities like San Francisco and Oakland, it is seen that even businesses, which are unable to pay off its creditors may file for bankruptcy under Chapter 7. In such situations filing for bankruptcy would mean that the business is willing to sell off its entire assets, deal out the proceeds to its creditors, and finally stop all its operations.
However, it is important to understand that filing for bankruptcy by a business firm, may or may not necessarily mean that the employees would lose their jobs. There have been situations when a firm has sold off an entire division intact to another firm.
About the Author
Attorney Steven Peck has been practicing law since 1981. A former successful business owner, Mr. Peck initially focused his legal career on business law. Within the first three years, after some colleagues and friend’s parents endured nursing home neglect and elder abuse, he continued his education to begin practicing elder law and nursing home abuse law.