Before you file for Chapter 7 bankruptcy, the individual must gather all relevant information together to assist in the process, checklists and various documents to back up the case. Be sure to bring copies of pay stubs, tax returns, bank statements and other relevant financial documents for the Chapter 7 bankruptcy attorney. Chapter 7 bankruptcy is a tool for those who have fallen behind on their obligations. If the individual’s debts are less than $150,000 in secured debt and under $300,000 of unsecured liabilities then they may be eligible to file Chapter 7 Bankruptcy.
In case you are having problems getting a loan with banks and credit cards because of your poor credit scores, then the best solution is to file chapter 7 bankruptcy. It is necessary that you should be not under a mortgage or any loan which might be of long duration. If possible do not even take up a new loan until your credit score is improved. However if finances are poor and you have no option left for repaying debts, then file chapter 7 bankruptcy.
There are many people who are unaware that they are declared bankrupt and their assets and salaries are distributed as a result. This is different from other means of settling debts as the government pays off all debts including those incurred during the period of bankruptcy. This is a huge benefit as you would be able to clear your name from debts within a short span of time. A debtor has to repay all his debts after a few years; some are in a position to clear it in two years while others may require a minimum of three years.
One of the biggest issues for people who are filing chapter 7 bankruptcy is the trust deed. This deed is issued by the trustee and is a legal document stating that the person who owed the money in the first place does not anymore owe them any money. The court delegates the responsibility of collecting the installment directly to the trustee and the borrower is asked not to contact him or her. There are several trustees who charge the debtor for collecting the installment and this should be taken into account while calculating how much money you owe the creditor. This information is necessary for you to avoid overlooking any obligations.
The trustee also asks the debtor for a discharge in the bankruptcy paperwork and this simply means that you are discharged from your debts. However, the trustee can only do this if the case is heard by the court and if the decision of the court is in favor of the debtor. If the decision is against you then you will have to repay the entire amount that you owe the creditor. This discharge will not prevent you from taking loans in the future but you cannot apply for loans until you are debt free.