Tougher rules for new Chapter 7 bankruptcy awaits debt-ridden consumers.

The most common type of consumer bankruptcy is Chapter 7 Bankruptcy. There are many different kinds of bankruptcy, but when most consumers consider the topic, this is the type they are probably most familiar with. Each type has different rules, regulations, guidelines and requirements.

This is something that a consumer might consider when they have a mountain of debt that they cannot see over the top of. Although there are usually other options, this usually comes about from your current circumstances, which interestingly enough in the majority of cases, is not due to financial mismanagement.

Despite what your friends may have told you, this process is not going to be easy. In past years, filing bankruptcy was almost as easy as it is in the game of Monopoly, and required little more effort. But today there are massive numbers of forms to be completed with very detailed information about your debts that goes into the filing.

This mountain of forms and applications needs to be completed, correctly, in detail, but even that does not guarantee you can file bankruptcy. The bankruptcy courts will look at your documentation and finances in great detail before they will approve it. Yes, it needs to be approved, and there is a chance that you will not be able to file bankruptcy if the court does not approve it.

In addition, you need to understand the source of your debt. For example, there are certain kinds of debt, including IRS liens and federal student loans that are not discharged by bankruptcy. So if those types of debts make up a large percentage of your overall financial obligations, any chapter of bankruptcy is not going to help.

Also consider the fact that a bankruptcy on your credit report is going to stand out like a huge red flag for the next 7 to 10 years. This will affect your ability to get a job, get good rates on car insurance, and of course get new credit established in the future. You can still get credit but will almost certainly be paying a much higher interest rate since you will be considered a higher risk.

Have you thought of how your life will change if you need to liquidate most of your assets? That is what is required with certain chapters of bankruptcy, where your assets are sold off in order to satisfy your debts. Other chapters do not require asset liquidation, but then your debts are not wiped out, but merely reorganized at lower payments and lower interest rates to make is easier for you to meet the obligations.

With the new bankruptcy laws, you are best advised to work with a qualified bankruptcy lawyer as you go through this. They can assist with the forms, the paperwork, and can advise you what to expect, as well as what other options you may have. The money spent on this attorney will likely more than pay for itself in time, trouble, and the number of assets you can retain.

About the Author:

For more insights and additional information about Chapter 7 Bankruptcy as well as getting a free bankruptcy evaluation from a qualified bankruptcy attorney local to you, please visit our web site at http://www.bankruptcy-data.com

Jay Anderson | Chapter 7 Bankruptcy |

Tags: Chapter 7 Bankruptcy

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