Bankruptcy in general is often shrouded in mystery and misinformation. Despite that fact that Chapter 7 bankruptcy became more common during the recession, it is still very serious business and it is vital to know truths from misinformation. Florida residents on the verge of filing bankruptcy need to understand what Chapter 7 bankruptcy will and will not do to their credit, bills and possessions.
First of all, Chapter 7 bankruptcy will let you discharge certain types of debts. Credit card debt can be discharged through the process. Bankruptcy will also give a filer extra breathing room, because, once an individual files, creditors have to stop the harassment. Filing bankruptcy will also affect anyone who co-signs a loan for a filer. That person will take on the liability for the debt.
There are many things bankruptcy will not let a filer do. Anyone who files for Chapter 7 bankruptcy cannot pick and choose what possessions to keep and what to surrender to creditors as part of the process. Bankruptcy does not wipe out child support or alimony payments. And, filing for Chapter 7 bankruptcy will not discharge student loan payments.
Chapter 7 bankruptcy has very specific rules and regulations of which anyone filing should be aware. Florida families who are considering Chapter 7 bankruptcy may want to be clear about those rules and what to expect before filing. Given the fact that there are several types of bankruptcy, understanding the differences can be the best way to ensure a filer is pursuing the type that is best for his or her unique situation.
Source: thestreet.com, “9 Nasty Pitfalls of Chapter 7 Bankruptcy That You Should Know“, John Persinos, Nov. 23, 2015