The primary reason that consumers choose chapter 7 is that it basically provides them with a clean slate. They utilize their assets to settle their debts. The benefit of this chapter is that the consumer isn’t required to pay out of pocket to settle debts. They also receive exemption payments that are applied to liquidated properties. To begin the chapter 7 process, consumers should call Bankruptcy Lawyers Dayton Ohio to schedule an appointment.
Chapter 7 Bankruptcy
Consumers settle their debts quicker with a chapter 7 bankruptcy than with chapter 13. The duration of their case is approximately three to six months. This chapter is beneficial to consumers regardless of overall debt value. However, they should own a significant amount of assets to settle all debts.
This is not the best option if the consumer is facing foreclosure, unless he or she can settle the outstanding balance during the short time allowance. The automatic stay applied to a primary residence is applied longer for chapter 13. However, the consumer is required to prove their eligibility for this chapter before filing a claim.
With chapter 7, the court appoints a trustee who acquires all legal titles or deeds from the consumer. Once the claim is approved the liquidation process begins. Most properties are sold based on their market value instead of their appraisal. This may significantly reduce the overall proceeds generated, but it allows for a quicker transaction. This is highly beneficial when selling real estate properties; especially those which are in foreclosure. In some cases, the buyer may provide their own funding, which reduces the waiting period.
The primary disadvantage of bankruptcy is that it remains on the consumer’s credit history for a longer duration. As a Bankruptcy Lawyer Dayton Ohio will advise them, it is better to rebuild slowly and avoid programs with high interest rates when acquiring credit. Credit-counseling programs often introduce the consumer to effective methods of rebuilding without falling back into debt. The purpose of filing bankruptcy is to eliminate debt and start over completely. Consumers who wish to discover the benefits of chapter 7 should contact Miami Valley Bankruptcy to learn more.
