by 
The Curious Bag
-
For many different reasons, some people find themselves swimming in debt that they are not able to get out of. Bankruptcy is always the last resort; however, bankruptcy laws are, by design, a tool to help the individual get back on his feet.
Chapter 7 Bankruptcy
If a Chapter 7 Bankruptcy is granted, the debtor is no longer responsible for repaying all or part of her unsecure debt.
Requirements
Not everyone is allowed to file for Chapter 7 Bankruptcy. Only individuals with incomes below the state median are allowed to file, and a test is given to see if she is eligible.
Asset Liquidation
If the court rules to grant the Chapter 7 Bankruptcy, the judge may also rule that the unsecure property of the debtor is to be sold. All money received in the sale of the property is given to the creditors.
After Chapter 7 is Discharged
After a Chapter 7 Bankruptcy has been discharged, creditors listed in the court filing are not allowed to contact the debtor to collect the unpaid debt.
Secured Debt
Although Chapter 7 Bankruptcy can relieve a debtor of the responsibility of paying unsecure debt, creditors who hold an interest in secured debt may still be able to pursue payment.
Source:
RELATED QUESTIONS
Copyright 2023, Wired Ivy, LLC