Chapter 7 Bankruptcy: One Of The Best Debt Relief Methods Available.

Credit-yogi.com understands that it is unfortunate, but sometimes people get to the point in their financial lives where they simply can't get out of debt. They have tried many forms of debt relief, but none have worked. Bad credit mortgages, car payments and credit card debt have simply gotten beyond their financial ability to control. They now must face the rather daunting prospect of declaring bankruptcy.

You may feel that bankruptcy is not a good thing, but it does have some big advantages. You can learn your personal options using a free consultation without any obligation though the credit-yogi “request a call back” form to the upper right of this page.

Simplistically, Chapter 7 bankruptcy wipes the financial slate clean and you can start afresh.This is certainly one of the most effective debt relief methods available. You may have debts in any amount, both secured (with collateral against them) and unsecured.

There is also a "means test" calculation made by the government of your income minus expenses. In general, if you are making more than the median income in your state for a family of your size you will have difficulty passing that test, but it is worth a try. The test will balance your income against expenses such as health care, education, and basic living expenses.

You may also be able to prove a hardship due to unforeseen circumstances or unexpected serious illness. The calculations are far too complex to discuss in the space available here, so the bottom line is that you simply have to apply for the calculation to be made and wait for the result.

When you qualify for debt relief through a Chapter 7 bankruptcy, the bankruptcy trustee appointed by the court will take possession of all of your non exempt assets. Exempt assets are defined under state laws and vary, but you should be prepared to lose some of your real property possibly including your house and car. However, all of your debts except for back taxes, payments due to criminal liability, and child support remain in force. Collection by creditors will be stayed (halted) however while the bankruptcy case is being heard.

It is true that a bankruptcy will remain on your credit rating for up to ten years. However, the odds are that if you have reached the point of bankruptcy there has already been considerable damage done to your credit rating, so you might take some comfort in thinking that at that point a little more damage isn't so bad. Either way, you will need to begin rebuilding your credit. Now, however, you are relieved of the majority of debts that were dragging your budget down and keeping you behind in the credit game. Buying a new car and making timely payments on it could be a good place to start.

You should also note that until the bankruptcy is discharged (meaning the bankruptcy case is closed), you are free to take action to recover assets. This would be the time to make your last attempt to find debt solutions. Your creditors might be more inclined to make a deal with you if you can show good faith in attempting to at least repay them more than the bankruptcy trustee would.

The entire process of a chapter 7 bankruptcy could take four to six months, possibly less. You will be expected to pay a filing fee and court costs. This might be lessened if your "means test" shows extreme financial hardship. As difficult as all of this may seem, keep in mind that the government did see the need to give people a fresh start in life without being crushed by debt that has gotten out of control. Take advantage of credit-yogi’s service so that you can avail yourself of all of the options that the government has made available to you under Chapter 7 of the federal bankruptcy code.

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