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Chapter 7 bankruptcy: What it is and when to consider it

On Behalf of | Oct 7, 2020 | Chapter 7 Bankruptcy

Without a doubt, financial struggles can cause anyone to feel stressed, worried and live in a constant state of anxiety. Florida residents who are under loads of debt and can see no way out may want to consider filing for bankruptcy. Chapter 7 bankruptcy, in particular, can wipe out credit card debt and other types of consumer debt. Here’s a more in-depth explanation of what Chapter 7 bankruptcy is and when to consider filing.

Chapter 7 bankruptcy is the most common type of bankruptcy and can give a fresh start to debtors who are seemingly drowning under a pile of debt. It allows for unsecured debt such as medical bills, credit card debt and personal loans to be discharged. However, Chapter 7 bankruptcy usually excludes obligations such as tax debt, student loans or child support.

In some ways, Chapter 7 bankruptcy is like a last resort. It may be necessary for a person to file when he or she is struggling to manage debt despite negotiating with creditors, working with a credit counselor or consolidating debt. It can also act like a pause button of sorts by barring creditors from collections actions once a petition is filed, pending the further order of the court.

However, Chapter 7 could mean losing some assets such as houses or investments. Although each state has its own laws concerning this, property can be classified as exempt or nonexempt. The process of filing for Chapter 7 bankruptcy usually takes about 80 to 100 days from the point of filing to when debts are discharged. It is strongly recommended that anyone filing for Chapter 7 in Florida hire an attorney, it is strongly recommended. An experienced attorney can answer difficult questions and guide an individual through the entire process.

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