What is Chapter 7 bankruptcy?
The primary purpose of Chapter 7 Bankruptcy is to help both the creditors and debtors. Chapter 7 is known as the “liquidation bankruptcy’’. Bankruptcy eliminates most of your unsecured debt and allows for the liquidation or selling of your assets by a Trustee. Unsecured debt often includes credit card debt, medical bills and personal loans.
From the debtor’s perspective, bankruptcy can mean liberation from the restrictions of debt, oppressive collection of debts from creditors and the freedom to start fresh. As for creditors, bankruptcy simply serves the purpose of freeing them from constant exhausting efforts to collect from the debtor and may provide them with some part of the debtors assets.
In a Chapter 7 bankruptcy the liquidation of assets can be expected. What is liquidation? It is when the assets of the debtor are distributed among the creditors to help remedy the debt. After this process, the debtor’s past debts are essentially erased and the case closes. Rest assured, however, there are a number of ways that you can protect most of your assets. Working with an experienced bankruptcy lawyer will help assure the maximum protection of your assets
“[T]he principal purpose of the Bankruptcy Code is to grant a fresh start to the honest but unfortunate debtor.”-U.S. Supreme Court
Why file Chapter 7 bankruptcy?
The Supreme Court has said that “[t]he principal purpose of the Bankruptcy Code is to grant a fresh start to the honest but unfortunate debtor.” The filing of a Chapter 7 bankruptcy puts a stop to most attacks on, and efforts to collect from the debtor. It is also the fastest, simplest and most common type of bankruptcy. According to the American Bankruptcy Institute (ABI), 63% of the 774,940 bankruptcy cases filed in 2019, were Chapter 7 cases. Although its not a guarantee but most Chapter 7 bankruptcy cases, 94.3% to be exact had their debts discharged (forgiven).
If you are in Utah call our office at 801-221-9911 or CLICK HERE to set up a consultation today and find out more about why you should consider filing Chapter 7 bankruptcy!