Chapter 7 bankruptcy can be a scary prospect. Since there are different types of bankruptcy, knowing what it means to file bankruptcy and when to file bankruptcy are the first things that you should find out when consider your options. However, there may be a few things about bankruptcy that you didn’t know. Let’s go over some Chapter 7 bankruptcy facts, so you can understand a little bit more about the process, as these chapter 7 bankruptcy facts will overlap with the other types of bankruptcy available.
- Bankruptcy is not uncommon. There were a total of 1,071,932 bankruptcies filed in 2013 — 728,833 of which were chapter 7, 8980 of which were chapter 11, and 333,626 of which were chapter 13 bankruptcies. The fact is, as hard and as devastating as filing for bankruptcy can be, you can rebuild after bankruptcy. It may take time, but it is not the end of the story financially for you. If there are that many people in the world that have filed for bankruptcy whose lives haven’t been completely destroyed by it, then one can safely assume that there is life after bankruptcy, if you are willing to take the time to build and conquer once again.
- It takes a minimum of $1,000 of debt in order to qualify to file bankruptcy. While people generally do not file bankruptcy for owing this amount, everybody’s situation is different. Even if $1,000 of debt doesn’t seem like a lot to you it could be completely unmanageable to someone else.
- One of the chapter 7 bankruptcy facts that not many people know about is that while your income is used to decide how long you will be in bankruptcy and what you will be paying on a monthly basis, the amount you make does not play a part in whether or not you qualify for bankruptcy. The main deciding factor is actually your assets versus your debt, not your debt versus your income.
- As mentioned earlier, filing for bankruptcy does not mean the end of your credit history. Even while The bankruptcy is on your credit report, you will still be able to apply and be approved for credit. You can still build credit during this time and after the bankruptcy is removed from your report it will get even easier.
- Chapter 7 bankruptcy means that all non exempt assets are liquidated and used towards paying debt. Any debt remaining will be dismissed. Chapter 13 is when the person doesn’t want to surrender all of their assets and is willing and able to still pay part of the debt.
- A Chapter 7 bankruptcy stays on your credit report for 10 years, while the Chapter 13 stays for seven years. This can seem like a long time, but if you are patient and understand the way that bankruptcy works, then it will be behind you after a seemingly short period of time. This is especially true if you are filing for the right reasons and do not regret the decision, which will only happen if you are fully informed before hand and do not rush head long into making a decision about filing for bankruptcy.
- You will still be able to buy a home after bankruptcy, although you may want to wait a few years. Lenders want to see if you have a good payment history and steady income. Otherwise, the interest rates might be much higher if you try to buy right away.
There are other chapter 7 bankruptcy facts that you should find out as well as information that you will need to know in order to file for bankruptcy. Being well informed is the most important part of filing for bankruptcy, because once you’ve started, there is no going back. You should obtain professional advice from a chapter 11 bankruptcy attorney or Chapter 7 bankruptcy attorney, depending on which one you were looking to file. Counsel from both types of attorneys could be helpful if you’re having trouble choosing. Do not make a decision like this alone, having someone by your side is very important at a time like this.