Chapter 7 Bankruptcy

Chapter 7 Bankruptcy is the most common form of bankruptcy where all or most of your debts are discharged and your assets forfeited if they were used to secure a debt. Property exemptions vary by state, but most states allow you to keep personal belonging up to a certain value, such as household goods. Any real property used to secure a debt is usually forfeited unless you can maintain full payment on them.

Not all debts are discharged in Chapter 7 Bankruptcy including child support, alimony, and fines associated with negligent or criminal behavior and unsecured debt incurred within 40 days of filing. Student loans are not usually forgiven unless you meet very strict hardship guidelines. If your bankruptcy goes uncontested, your debts may be discharged in 3-6 months from filing. Creditors can, however, contest bankruptcy proceedings on the basis of fraud, breach of trust, etc. This often occurs when a debtor signs up for new credit (12-24 months prior to filing) and runs up their bills.

Chapter 7 Bankruptcy (which is different than Chapter 13 Bankruptcy) can provide immediate debt relief -- it halts any kind of collection efforts from creditors, including wage garnishments, utility cut-offs, foreclosures, etc. Because Chapter 7 Bankruptcy remains available to you no matter what stage your debts are in, we believe that it is something you should never rush into. Bankruptcy of this nature can carry deep psychological problems and it stays on your credit report for the next 7 years. It severely limits your ability to borrow in the future.

At New Leaf Debt we believe there are better debt help alternatives to bankruptcy out there. Some other forms of debt relief are: Debt Negotiation, Credit Card Debt, Debt Management, Consumer Credit Counseling, and Debt Consolidation Program.