Chapter 7 Bankruptcy

Chapter 7 bankruptcy truly offers consumers a “fresh start.”  Many bankruptcy lawyers refer to the chapter 7 BK as the “liquidation” bankruptcy because it cancels your debts in exchange for allowing the bankruptcy court liquidate some of your property for the benefit of your creditors. The Chapter 7 Bankruptcy encourages debt relief because unsecured debts are generally forgiven (discharged), which is why many people consider this form of bankruptcy a “new beginning”. But, it impairs credit for 7 to 10 years and generates a public record about you.

Bankruptcy protects consumers against lawsuits from creditors, but the extent of protection isn’t as much under the new bankruptcy laws. Other changes have been made, as well, that affect anyone filing for bankruptcy.  If you have more than $12,000 in credit card debt and you want to avoid bankruptcy, consider debt settlement.

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