A Bankruptcy Lawyer’s Blog

ABCs of Chapter 7 Bankruptcy

We have all heard about bankruptcy, but not many of us know the details. There are four types of bankruptcy but we will be discussing Chapter 7 bankruptcy. This type of bankruptcy is basically liquidation where the debtor hands over all assets so they may be sold and the resulting cash may pay off the creditors. Once this occurs then all the debts that are dischargeable will be discharged in a time frame of about four months. Most people who file chapter 7 bankruptcy do so when they dont have any assets to speak of so there really is nothing to sell off or lose and there is a fast start to a new life with no debts.

The reason Arizona bankruptcy lawyers work with people to file Chapter 7 bankruptcy is to help people get out from under the burden of their debts. Fortunately, if you are in debt so far over your head that you cant handle the stress anymore then consider consulting Phoenix bankruptcy lawyers to help you get out of the mess. Once you contact a lawyer they will be able to walk you through the process of filing for bankruptcy and eliminating your debts almost immediately. There are several reasons why people file for bankruptcy and they include large expenses that are completely unexpected that place an unusual burden on the individual as well as overextended credit, marital problems like divorce, as well as unemployment and medical expenses that are too much to pay.

A study conducted by Harvard showed that at least half if not more of US bankruptcies were a direct result of medical bills. This may happen to you because nobody knows what the future holds and accidents happen every day. So, dont worry too much if you have to file bankruptcy because you will eventually be able to rebuild your credit.

Many banks are now responding to the many Americans who have filed bankruptcy and helping them rebuild their credit. Secured credit cards are simply credit cards that are secured by an amount of money as a guarantee. So, if you paid a security of $200 then your credit would be $200. As you prove your ability to pay then your credit is increased slowly but surely and your credit score increases over time. Amazingly, two years after a bankruptcy has been discharged debtors are frequently given mortgage loans that have equally good terms as others in the same financial situation who have never filed bankruptcy.