Debt is a problem that can affect anyone. Whether a person has a substantial income or a modest one, unexpected life events can throw off one’s ability to meet their financial obligations. When a Virginia resident cannot manage the payment of their bills and finds that what they owe is more than what they earn, they may need to review their options for finding economic relief.
Bankruptcy is a legal tool that both private and corporate persons can use to work through their debt troubles. However, bankruptcy is not a single process with one set of rules. There are a number of different types of bankruptcy that may serve the interests and needs of different parties.
Chapter 7 bankruptcy is often called liquidation bankruptcy and is available to both individuals and businesses. It involves the sale or “liquidation” of the debtor’s assets so that the proceeds may be used to pay off creditors. Not everyone is eligible for Chapter 7 bankruptcy and interested parties should know the filing requirements before starting the process.
One advantage of pursuing Chapter 7 bankruptcy to overcome debt is the automatic stay. When Chapter 7 bankruptcy begins, outstanding debts are automatically stayed, and creditors may not pursue collection of them as the bankruptcy proceedings move forward. During the bankruptcy process, a debtor may experience some relief from the constant worry of paying creditors’ bills.
This overview of Chapter 7 bankruptcy is offered as information only and should not be substituted for sound legal advice. Bankruptcy attorneys are good resources for individuals who wish to overcome their debts and move forward in life without the burden of financial debt.