What is Chapter 7 Bankruptcy in Newton

by | Oct 16, 2013 | Bankruptcy Attorney

When financial situations get out of control, many people will turn to bankruptcy as a viable way to get back on their feet, financially speaking. However, if you’re considering bankruptcy, you need to understand that there are several different types of filings for bankruptcy and you’ll need to know which one is going to be a right filing for you. If you’re an individual and you are having problems with your personal finances then most likely, the type of bankruptcy you will end up filing for is a Chapter 7 Bankruptcy in Newton.

What filing for Chapter 7 Bankruptcy in Newton equates to is a cancellation of most of your personal debt. However, things such as tax debt cannot be discharged in a bankruptcy filing. So if you’re facing a significant tax bill and that’s your motivation for filing for bankruptcy, you’re not going to get any relief from the courts on your tax bill with any type of bankruptcy filing.

This type of bankruptcy will cancel most of your personal debt and in some cases, if you have a fair amount of assets, the court may require you to sell off some of those assets in order to repay your creditors a certain amount of money. However, this is greatly going to depend upon your personal situation, and if you have few assets outside of the necessities, the court is not going to require you to sell your car or your home in order to pay your creditors. In these cases they will simply cancel the debt.

This type of bankruptcy is extremely beneficial but it does take a fair amount of time to complete. In addition to the 3 to 4 month court process, your bankruptcy after being discharged will likely stay your credit report anywhere from 7 to 8 years. This could inhibit you from getting new lines of credit in the future and can make it difficult if you want to buy a home or purchase a car through financing.

Chapter 7 bankruptcy filing is something that can be extremely beneficial but you do need to understand all the repercussions. The idea of having most of your debts canceled can be appealing, but you’ll have to weigh the good and the bad to determine whether Chapter 7 filing is the right course for you and your finances.Iowa Bankruptcy Law Firm offers a free one hour consultation where they can present to you the best options for your specific situation.

Visit us at Jankins Law Firm to get more information.

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