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Understanding the basics about Chapter 7 bankruptcy
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Understanding the basics about Chapter 7 bankruptcy

On Behalf of | Jun 6, 2023 | Bankruptcy & Asset Protection

Millions of Americans are struggling with debt, and Florida residents are not immune to these difficulties. The last few years have presented real challenges for many people. Well, Chapter 7 bankruptcy could be a path toward a financial fresh start.

Chapter 7 basics

Many of our readers in Florida are probably familiar with at least some of the basic concepts of Chapter 7 bankruptcy. For starters, this form of bankruptcy is commonly referred to as liquidation bankruptcy. This is because, in essence, Chapter 7 bankruptcy is all about selling off a person’s assets, and then the proceeds from those sales are applied toward outstanding debt obligations. After that, any debt that remains unpaid is discharged.

Fairly straightforward, right? Well, as always, there is a little bit more to it than that.

First and foremost, there are eligibility requirements that must be met, with one of the main issues being a means test. And then, there is the issue of assets – not all of a person’s assets are sold off in Chapter 7 bankruptcy. In fact, many assets are considered to be exempt from the bankruptcy process, which means those assets will not be liquidated and the bankruptcy filer can maintain ownership of those assets.

If you are struggling with debt burdens, it may be time to explore whether or not Chapter 7 bankruptcy is an option that is available to you.

There are pros and cons to any form of bankruptcy, so be sure to get the right information about your own unique financial situation. If you are eligible, Chapter 7 bankruptcy can give you the clean slate you need to start out on a new, better financial path.