What is Chapter 7 Bankruptcy? 03/26/2010
Chapter 7 Bankruptcy is a Federal Program, which is usually referred to as “Liquidation” Bankruptcy. The name is more menacing than it really is. The idea is this: your creditors are being kept at bay behind a large dam, like a lake. You, your home, and all your possessions are directly downstream of this dam. The whole time your creditors are there they are harassing you, and they won’t go away until either you pay them off, or you let the dam break. Bankruptcy acts to break that dam and let them all loose, NEVER to bother you again. However, your possessions (the ones you actually own or have equity in) are at risk – that is the catch.
But, the federal government has established two different methods of protecting at least some of your possessions. One is a figurative wall that acts to protect your house and at least most of the things in it. The other is like a boat that will take on board at least most of your household items, keeping them safe.
Most of the time, we are able to protect all of your possessions utilizing one or the other of these methods. Now, every case is different, and the determination of what can be protected and what is at risk is difficult to make without a complete examination of your whole case. This metaphor is to give you an idea of what Bankruptcy entails. There is a risk, but it is our duty to help you evaluate that risk and manage it.
When you come in, we can help you better navigate this whole situation, so that you make the choice that is right for you.