Debt Consolidation Credit Counseling In Phoenix

You hear the term chapter 7 bankruptcy quite a lot these days, however normally a proper explanation of exactly what it is is not included. Sadly many folks make dreadful errors in their bankruptcy filing because of this lack of explanation.

It is more than understandable that most of us will want to avoid getting into bankruptcy proceedings. Naturally the idea of being in a situation where your debts are worth more than what you earn is not very popular.

There isn't just one kind of bankruptcy proceeding, in fact there are a number including chapter 7 (the focus of this article) and Chapter 11. Chapter seven is more for individuals.

Chapter 7 bankruptcy explained

According to the law and the United States court system, Chapter 7 bankruptcy refers to liquidation of assets that are not legally exempt from liquidation in order to pay off creditors and debtors.

Chapter 7 is an option open to individuals, businesses, partnerships and corporations. There is, however, a special clause open to the individual within the framework of this chapter filing that is not available to the other entities.

This extra clause for the individual is commonly known as a discharge. In essence what this discharge entails is the opportunity of freeing the individual from a host of certain debts.

Filing Chapter 7 Bankruptcy

On a baseline level, those filing for Chapter 7 must provide copies of tax returns; executed contracts and leases that have been expired; financial affairs statements; proof of assets and liabilities; and copies/schedules of current expenditures and income.

For individuals other additional documentation has to be supplied to the courts. As an individual you can expect to have to supply copies of statements of income and or employee payments, credit counseling reports etc, also students will need to supply documentation for interest payments on student loans.

The information in this document is very brief and general, if you need to find out more about chapter 7 bankruptcy and others, a good place to start would be with the links in this article and also with the US courts website. If you do file for bankruptcy make sure you get a good lawyer.