Monday, November 6, 2017

When To File A Chapter 7 Bankruptcy Utah

By Michelle Johnson


If you find that your income is not able to service your debts and cover your living expenses at the same time, you may need to seek legal protections. This is because your debt will only increase as interest continues to accrue and penalties added to an already bad debt. Your only option may be to seek bankruptcy protections. You can file a chapter 7 bankruptcy Utah to try and resolve the debt burden.

When you are declared bankrupt, the law will protect you from harassment by creditors and their agents. You will also be protected from the mushrooming debt since all debts will be frozen, so no interest will accrue. If creditors want to send a message to you, they must do it indirectly through the trustee. If they communicate to you directly, they can be charged in court.

There are several disadvantages of becoming bankrupt. However, the benefits outweigh these disadvantages. Once your debts have been forgiven, you should try to live within your means. Be sure to also stay away from debt. Instead, you should try to save for major purchases.

As you may already know, there are several other chapters that you can consider when seeking to become bankrupt. These are chapters 11 and 13. However, the former is only available to businesses and other types of organizations, not individuals. The latter, on the other hand, is only available to consumers with a reliable source of income.

Any organization, business, corporate entity or individual consumer can qualify for debt forgiveness under chapter 7 bankruptcy. The only requirement that they are required to fulfill is the lack of sufficient income to service their debts. Anyone who has a reliable income would be advised to seek debt reorganization.

In a chapter 7, property owned by the debtor are normally sold to recover funds that will be used to settle their debts. It is important to note that there are some assets that cannot be sold. For instance, assets that have been exempted from liquidation through federal or state sponsored exemption laws cannot be touched.

Assets are normally disposed of through an auction organized by the trustee. Once all the non-exempt assets are sold, the proceeds of the sale are forwarded to all the creditors proportionately. Once this has been done, all the debts that were subject to the proceedings will be forgiven. Unfortunately, the auction will come with some publicity, which may damage your reputation and standing in society.

There are a number of serious consequences that come with this option. For one, your credit report will show that you are a bankrupt consumer. This means that you will not be able to qualify for conventional loans from banks and credit unions. Secondly, anyone who runs a credit check will know about your status. Which means that you may not be able to rent a house or car, since most landlords and car rental companies nowadays run credit checks. However, having all your bad debts written off can make all this worth it.




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