Should You File Chapter 7 Bankruptcy?

People who owe far more money to creditors than they make on a monthly basis have probably considered filing for bankruptcy on more than one occasion. If you have decided to pursue that route, you may wonder whether you should file Chapter 7 bankruptcy or Chapter 13? The best way to make that decision is by consulting a legal professional experienced in bankruptcy law.

It is also good to dispel the misconceptions that surround filing. You may have heard that by doing so, you won’t have to worry about losing any of your property. This is patently false, especially if you do not have a source of income and own a home. Creditors will go after everything you have unless you are working with a lawyer that can place protections on certain types of property if needed. Another canard is that filing is a quick-fix for all your financial problems. On the contrary, debt resolution by way of bankruptcy can take months, sometimes even years, to end.

Chapter 7 bankruptcy is, far and away, the most common type seen in the U.S. court system. It is designed to relieve individuals of debt by having a court-appointed official take control of the debtors property and assets. From there, the official begins to sell off the property, using the profits of sale to pay back the various creditors that the debtor owed money. This process usually takes around four months to complete, and is typical for people who are unemployed. This way can benefit you, however, if you hardly have any property to lose. In that case, the court may dismiss the debt altogether.