Wiping The Slate Clean With Chapter 7 Bankruptcy

There are few chances in life to let go of past problems and get a fresh start, but bankruptcy can be one such opportunity. Chapter 7 bankruptcy focuses on discharging most debts rather than repaying them. The process can be completed rather quickly — usually within about four to six months — and the simple act of filing brings an immediate halt to debt collection actions and creditor harassment. This is known as the "automatic stay."

What You Should Know About The Potential Downsides

The benefits of filing for Chapter 7 bankruptcy are alluring to anyone struggling with overwhelming debt. But there are things you should be aware of before deciding to pursue debt relief using this option:

Not everyone will qualify: If your income is higher than the state median in
Georgia, you will need to take a means test assessing your ratio of income to debt. Those who do not qualify for Chapter 7 can instead file for Chapter 13 bankruptcy.

Not all debts can be discharged: Chapter 7 allows you to discharge nearly all unsecured debts. This includes medical bills and credit card debt relief. But certain debts and financial obligations are almost never dischargeable in a Chapter 7, including student loans, child support and some tax debts.

You may need to forfeit certain assets: Chapter 7 is often referred to as liquidation bankruptcy, because it may require you to liquidate certain luxury assets to partially repay creditors. Thankfully, however, you can seek legal exemptions for some of the assets that are most important to you.

Your credit will be damaged for a decade: A Chapter 7 filing stays on your credit report for up to 10 years. However, if you are filing for bankruptcy in the first place, your credit score may have already been damaged due to overwhelming debt and late/missed payments. In some cases, a person's credit score may actually increase after filing for bankruptcy.

On the whole, many people find that the downsides to Chapter 7 are acceptable in light of the benefits. But to know how it will impact you and your family, you should speak to an experienced Chapter 7 bankruptcy lawyer like those at our firm.

Chapter 7 Business Bankruptcy

When filing as a business owner, your personal liability for business debts will depend on the type of business structure you have. A sole proprietorship, for instance, has no liability shield and no separate financial structure. Therefore, it is like filing Chapter 7 as an individual. For limited liability companies (LLCs) and corporations, however, there is a greater distinction between personal and business debts/assets.

When you file Chapter 7 bankruptcy as a business owner, it often (but not always) means the dissolution of your business. Assets will be sold off to repay creditors, which makes it difficult to remain in operation.

To understand your full options, however, you should speak to an attorney.

Contact Us For A Free Case Evaluation

Brow and Associates, LLC, has offices in Greensboro and Augusta, and we serve clients throughout east-central Georgia. To take advantage of a free case evaluation over the phone, give us a call at 706-688-9007. You can also fill out our online contact form.

We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.