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What is Chapter 7 bankruptcy?

When someone is in a financially challenging position, they may be interested in the options they have under the federal bankruptcy laws. One option for Massachusetts residents laden with consumer or other credit card debt is Chapter 7 bankruptcy.

Chapter 7 bankruptcy is a type of bankruptcy that allows people to obtain a discharge of many of their debts and get a fresh financial start. At the same time, there may be a requirement to sell some of the person's assets to help pay off the debt. This is sometimes referred to as "liquidation," but there are a variety of situations and circumstances. Each person who files for bankruptcy has a unique situation with different debts and obligations.

A person who is interested in filing for Chapter 7 bankruptcy protection must meet certain criteria. Often if someone fails to meet these prerequisites, the bankruptcy can be converted into another form that a person is eligible for. There are a number of steps an individual must take when filing for Chapter 7 bankruptcy including taking part in a credit counseling session with a nonprofit agency, providing evidence of income and debts and preparing a detailed list of financial information.

Every individual who is struggling with debt has a different situation. Before filing for Chapter 7 bankruptcy, an individual would be wise to meet with an experienced bankruptcy lawyer. The information in this post is general. By contacting a bankruptcy attorney you can get specific advice about your specific situation and options.

Source: Findlaw.com, "Chapter 7 Bankruptcy," Accessed on August 23, 2014

Source: Findlaw.com, "Chapter 7 Bankruptcy," Accessed on August 23, 2014

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