Finance

February 26, 2018 at 4:00 am

Filing a Chapter 7 Bankruptcy: What You Need to Know

A businessman got bankruptFiling for a Chapter 7 bankruptcy can be a tricky endeavor for people looking to seek relief from an enormous amount of debt. This underlines the need to do it properly and increase the chances of approval.

Most people consider themselves great money managers, even when the odds are weighed heavily against them. Studies reveal that over 52% of employees stress over their finances. A further 45% of them admit that finances are the leading stressor in their lives.

However, given the sensitive nature of the matter, people rarely open about their financial woes until it is too late. If your financial woes drive you to look for a Chapter 7 attorney in Salt Lake City, here is what you need to know:

It doesn’t cover all your debt

A Chapter 7 bankruptcy is a debt relief program by the federal government that seeks to ease the lives of people drowning in debt. Under this provision, you get a waiver of the unsecured loans such as the credit card debt, payday loans, and personal loans. However, it does not cover student loans, child support, alimony, and back taxes.

It is often a measure of last resort when you run out of options and are unable to service a bludgeoning debt. As such, you need to convince the federal government of your plight and pass a series of assessments over a period of six months.

It’s possible to derail the process by misconduct

While filing for bankruptcy gets creditors and bill collectors off your back, you should not take it as an easy way out. The government makes every effort to ensure that only the people who need the waive get it. As such, they will take a fine-tooth comb through your life until they are satisfied that you are up against the wall.

You should not try to transfer or hide any assets that you may have to qualify. Such underhand tactics are frowned upon and could land you in legal trouble while hurting people who genuinely need the waiver.

Filing for bankruptcy is a measure of last resort for people drowning in a debt they can’t hope to clear. As such, you should apply for a Chapter 7 when backed against the wall.