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If you're filing Chapter 7 you're looking for a fresh start to
clean up your
debts. Frequently, this is the only way to get through the
potential mounds of debt that you have buried yourself in. Although lots
of people
think poorly of people that use this filing, it really can be a necessary
obstacle. When you file bankruptcy, the bottom line is not
that you're trying to get out of paying for your legal debts, but rather
that you are trying to find a way to live without fear in you life. Chapter 7 is
not necessarily a bad thing when it gives you an extreme opportunity to correct
a substantial mistake you've made.
What Happens when you file Chapter 7?
You may know what bankruptcy is, but you probably don’t realize what
it means in reality. There are two different types of bankruptcy
filings that you can file as an individual or a couple.
The first type of bankruptcy is that of Chapter 13. In this type
of bankruptcy, you or you and your spouse will have to pay back everything you
owe your creditors, but the debt is restructured and so that you can actually
pay the money back. Normally, this done through extended payment
terms so you don't have your credit card companies and other
creditors badgering you.
Second, there is Chapter 7
which will work to erase your debts and give you or you and your spouse a
fresh start without having to pay back any of the debt you owe.
This gives you a clean sheet to start your life again without the
threat of creditors hounding you.
That said, a black mark is placed on your credit report, in
either case, which will stay on your credit report for the next ten
years.
Any new debts, credit cards, etc. that you incur after your
chapter 7 filing or anything that was not included you going to have to pay back.
Legally the creditors that you owed money to can't attempt to
collect the from you any more.
You're also going to find that it will be
much harder to get loans after your filing. If you can get a loan or a
credit card, you're likely to
pay a very high interest rate because of your past bankruptcy.
Many people file Chapter 7 because they've gotten so deep into
debt that it's almost impossible to dig their way out. Many have
had to deal with huge medical bills or they simply got carried away with with
their credit cards and now find themselves caught, under tremendous
pressure and there
is no way out. If you are in a situation like
this, especially when there is no simple solution.
Chapter 7 may be a way for you to find a new beginning and the hope for a new future
without debt.
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