The Chapter 7 bankruptcy is a liquidation type of bankruptcy. Generally speaking most people who file a Chapter 7 bankruptcy have no assets that need to be liquidated. In this case the Chapter 7 bankruptcy simply eliminates all of the debt that you owe to your creditors.
There are both Federal and State exemptions of assets that can be utilized by an individual filing a Chapter 7 bankruptcy. The purpose of these exemptions is to allow an individual to keep their car, their home and various other assets.
Assets and Debts in the Chapter 7 Bankruptcy
The Chapter 7 bankruptcy involves filing a series of financial statements. The financial statements show what your assets are and what your debts are. The purpose of these financial statements is to show you have a current inability to pay your debts. This allows you to qualify for the filing of a Chapter 7 bankruptcy.
The Chapter 7 Bankruptcy and its impact to your credit
The Chapter 7 bankruptcy filing is usually entered into to eliminate an individual’s debts. The filing of a Chapter 7 bankruptcy does not repair the debtor’s credit. Sometimes the filing of a Chapter 7 bankruptcy actually improves the debtor’s credit because the debtor no longer has any debt. The Chapter 7 bankruptcy filing will stay on a debtor’s credit report for up to 10 years. However, a program can be undertaken to rebuild the debtor’s credit. Our office has had success in rebuilding debtor’s credit during a period of 12 to 18 months after the filing of the bankruptcy.
About the Author
Elliot S. Schlissel, Esq. has been representing clients in bankruptcy cases for more than 45 years. He is the managing partner of Schlissel DeCorpo LLP. The law firm represents homeowners and other debtors in filing Chapter 13 and Chapter 7 bankruptcies. In addition, the firm represents homeowners in foreclosure defense in the New York State Courts. The law firm has an excellent history of helping homeowners obtain mortgage modifications. Elliot and his staff of attorneys can be reached for a free consultation at 800-344-6431 or e-mailed at Elliot@sdnylaw.com.