Most bankruptcies filed in the United States are filed under Chapter 7 of the Bankruptcy Code. The advantage of a Chapter 7 bankruptcy is that is gives you the opportunity to completely start over in your financial life.
While the laws have changed significantly in the last few years, the purpose of Chapter 7 bankruptcy law has not changed. It is designed to help people who find themselves buried in an insurmountable amount of debt that they are completely unable to pay.
A chapter 7 bankruptcy is started by filing a petition in federal bankruptcy court. Once the petition is filed, you are protected from your creditors. The protection is immediate and is known as an "automatic stay." This automatic stay means your creditors cannot contact you to discuss your debt. It also prevents them from filing a lawsuit against you in an attempt to collect the debt.
Generally, within 45 days of filing your bankruptcy petition you'll have to attend a hearing at the bankruptcy court. This is a hearing you must attend. It's usually held in a room separate from the actual courtroom. The other persons who will be at the meeting are your attorney and the bankruptcy trustee. The trustee is the person assigned by the bankruptcy judgment to oversee your case and see to the elimination of your debt. Of course, your creditors are allowed to attend the hearing. But, creditors rarely ever attend these hearing so it's generally possible to go through a chapter 7 bankruptcy without any protest from creditors.
During this hearing, the trustee will ask you some questions about your income, your assets and your debt. The whole process typically only takes about 15 minutes. After the hearing, the trustee will make a recommendation to the bankruptcy court to discharge your debt. You will usually receive a discharge statement in the mail several months after the hearing.
Chapter 7 bankruptcy is generally the easy form of bankruptcy in the U.S. Many times it's the only way for you to get out a huge mountain of debt that you have no way of paying.
Harvey L. Cox is an attorney and certified mediator in Texas. For more Chapter 7 Bankruptcy information visit The Bankruptcy Debt Relief [http://BankruptcyDebtReliefNow.net] Center.
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