Chapter 7 Bankruptcy
Chapter 7
Also known as a "liquidation" or a straight bankruptcy, in a chapter 7 bankruptcy, most property of the consumer filing for chapter 7 is sold and the proceeds of the sale or liquidation are distributed to the consumer's creditors.
In the real world however, it's clear that most consumers who file for chapter 7 bankruptcy have reached a point where there are little assets to be sold and proceeds to distribute.
The most common type of bankruptcy filing, accounting for more than 60% of all bankruptcies filed each year, chapter 7 bankruptcy is marketed as being one of the quickest forms of bankruptcy to go through.
Learn more about: Debt Relief without bankruptcy.
Misconceptions
But let's be clear about chapter 7, bankruptcy is by no means a wiping of the slate clean. It is by no means a simple walk in park. Those who have been through a chapter 7 bankruptcy would say that perhaps it IS as a walk in the park - a walk through Central Park at 2 a.m. with gold chains dangling from your neck.
A great misconception about chapter 7 bankruptcy as we have said is that it wipes the slate clean. But in reality, this is not the case. These decisions are left in the hands of a bankruptcy judge. The judge has sole discretion as to what occurs. In other words, a person who files a chapter 7 bankruptcy petition is at the mercy of a bankruptcy judge. How do you like them apples
Alternatives
There must be a better way. And there are in fact a great many alternatives to chapter 7 bankruptcy. Bankruptcy alternatives they can be summarized as. These debt relief programs are able to achieve spectacular eliminations of credit card debt without the need for a chapter 7 bankruptcy filing, and without the need for a risky home equity loan
The real shame of our situation today is that bankruptcy lawyers are well aware of all the harmful consequences of a chapter 7 bankruptcy filing - yet they make no mention of these serious consequences to unsuspecting consumer who is playing their trust and their very livelihoods in their hands.
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