Reliable Chapter 7 Bankruptcy Attorneys in Chico-Redding
Chapter 7 bankruptcy is one of the most common filings used by individuals, and it is also used by businesses. If you own a business but want to keep operating, this may not be the right choice. We can discuss other options with you. If you are an individual, it is important to know the limitations of Chapter 7 bankruptcy.
What Is Chapter 7 Bankruptcy?
This is essentially a liquidation bankruptcy and is also called a straight bankruptcy. If you want your debts wiped out, this is the option that wipes many types of debts clean. Although you may eliminate some debts, Chapter 7 bankruptcy stays on your credit report for 10 years as a negative mark and brings down your score considerably. In comparison, Chapter 13 stays on your credit history for seven years. Businesses that use Chapter 7 bankruptcy usually surrender assets and cease operations in exchange for most debts being erased.
Not all debts are eligible to be erased. Chapter 7 bankruptcy wipes out many types of debts such as store charge cards, credit cards, medical bills and several others. However, major assets that are on loan must be surrendered if you cannot afford to continue making payments. If you have a home and a vehicle but do not want to lose them, you can agree to continue making payments to the creditor and still wipe out other debts. These are some debts that are usually not erased:
- Student loans
- Child support
- Federal, state and local taxes
We will be happy to review your debts and income to see if there are any other solutions. If Chapter 7 bankruptcy is right for you, we are here to help every step of the way. Call now for a free consultation.