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What is Chapter 7 Bankruptcy?

 

In a previous post, we talked about filing for bankruptcy can delay — and possibly — stop foreclosure. There are two paths you can take with foreclosure bankruptcy, and in this post, we’ll examine the most common of those: Chapter 7 bankruptcy.

In Chapter 7 bankruptcy, all non-exempt property of the debtor is given to the court in exchange for discharging of debt. In general cases, creditors are looking for money to pay off your debt, and your property usually doesn’t offer sufficient equity for them thanks to depreciation. In those cases, a payment process to “buy back” property is negotiated.

In the specific view of a foreclosure, filing for Chapter 7 does put a stay on repossession of the property. After the 4-6 month process completes, other areas of debt (credit cards, etc.) will be wiped clean. However, your credit score will be ruined (more on that in a second). This does, though, give you a clean slate to work with.

While Chapter 7 indicates that you’ll lose your home in foreclosure, there might be a way to stay in your home long term. In some cases, you can negotiate with the bank on payment terms and try to work out a solution to buy back your home. Now, keep in mind that if you file for Chapter 7 bankruptcy and want to try and keep your home, the best thing to do is to hire an attorney who can negotiate some sort of post-bankruptcy settlement with the lender.

If you lose your home, you must remember that a Chapter 7 bankruptcy stays on your credit report for 10 years from the date of the filing. While this won’t automatically disqualify you from receiving credit, you must work your way back up and rebuild it when you’re ready to buy a new home.

That’s Chapter 7 Bankruptcy, but what about Chapter 13 Bankruptcy? We’ll look at that in the next post.

Search for foreclosure homes www.bestreohomes.com

The views published here are the opinions of the writer and are not a substitute for legal counsel.

 

Posted: Wednesday, February 24, 2010 4:45 PM by Israel and Rachel Gonzalez

Comments

Kai said:

In these days some people are suffering from bankruptcy and https://topaussiewriters.com/bestassignmentservice-com-review/ also giving information about 7th chapter of bankruptcy. It is important for those people who need to pay their debts. There are some laws for such people so they can pay debts.

# October 26, 2017 2:01 AM
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