Chapter 7 bankruptcy is a type of personal bankruptcy protection which can help struggling consumers get out of debt. Living with overwhelming debt can be stressful which is why struggling consumers should be familiar with the personal bankruptcy protection options available to them to help them overcome crushing debt.
Chapter 7 bankruptcy is generally considered a liquidation bankruptcy. The bankruptcy court will provide protection to the struggling consumer. An automatic stay is the first step when the filing party files for bankruptcy protection. The automatic stay protects the filing party from any further collection actions and creditors while the bankruptcy process progresses. This can provide some initial relief for the struggling consumer. Further relief will also be provided through the process.
At its conclusion, the personal bankruptcy protection process is designed to provide debt relief to the struggling consumer. The process usually lasts three to six months. The Chapter 7 bankruptcy process allows the filing party to liquidate non-exempt assets to repay creditors and enjoy a fresh financial start. Unsecured and secured debts can be treated differently in the process so it is helpful for the filing party to understand how the process works and to know what to anticipate from it.
Understanding personal bankruptcy protection and the different types is essential for those struggling with debt. There are personal bankruptcy different options for individuals in different situations which is why it is worth it for them to be familiar with all of their options and protections available and decide which one works best for them.