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You may consider a chapter 7 bankruptcy as a fresh start with a life not overburdened with unmanageable debt.  The chapter 7 was created just for the individual debtor and is used to discharge certain eligible debts.  Once the court discharges the debt it means you no longer have any responsibility for the liability.  Not all debts can be included in this type of bankruptcy filing, but for many people that don’t have any of the exempted debts, this bankruptcy literally allows them to start with a clean debt slate.

The chapter 7 bankruptcy should be handled by an attorney who is a specialist.  Though the chapter 7 filing is one of the less complicated filings in many cases, there are still specific and complex laws governing how the process will be handled.  The reason it can be less complicated is only because many people filing a chapter 7 are dealing with the normal types of debt such as mortgages, credit cards and past due taxes.   Of course, this doesn’t hold true for everyone, but for many people the chapter 7 filing turns into a fairly simple process.

But even in the simple cases, the right forms must be filed and the laws followed.  For example, the bankruptcy attorney must submit a petition to the court requesting the bankruptcy along with certain financial schedules detailing your income and expenses.  The court is also given a copy of several years’ worth of tax returns.

When you and your bankruptcy attorney decide to file a chapter 7 bankruptcy, you have to complete a credit counseling course.  In most cases, you can complete an online course now which makes it very easy to fulfill the court requirements.  There are some filing fees which must be paid to the court also, but if you can’t afford the fees, the attorney can ask the courts to allow you to pay the fees in installments.

Under the chapter 7 bankruptcy laws there are certain assets which are considered exempt property.  In fact, individual states are allowed to define this exempt property too, so your attorney can pick the most lenient definitions which will give you the most relief.  This is why you need an experienced bankruptcy attorney.

When the bankruptcy is filed, you will find that the debt collection efforts stop quickly.  In legal terms, this is called an automatic stay and it stops telephone calls, garnishments, levies, lawsuit filings and so on.  This is another reason why it is critical that you list every single creditor in your life on your financial schedule.  Even if you are not sure you owe the debt, it should be listed to prevent future collection efforts.

The court is going to appoint a trustee to handle your filing.  The trustee will hold a creditor’s meeting which gives your debtors the opportunity to explain why they do not believe the debt owed to them should be discharged.  The trustee can also ask you questions about anything you included on your financial statements.

A chapter 7 bankruptcy is a way for people unable to pay their debt to clear the slate and start fresh.  It is a important decision to file bankruptcy, but this is a step  that can give you the chance to begin a new  financial life.

Usually it is possible to avoid bankruptcy with some major financial planning and whole new attitude towards your standard of living.  In other words, you can avoid bankruptcy

if you make plans to do so and then stick with those plans.  There are plenty of reasons why you would want to take this approach if there is a way to avoid bankruptcy.  Bankruptcy is

life changing for many years and can make it more difficult to do certain things for up to 10 years including getting credit you need.

Avoiding bankruptcy is not something you can do in a haphazard manner.  It requires a serious evaluation of your current financial status, a desire to reduce your debt and a determination to do whatever it takes.  Your plans will require some sacrifices and belt tightening, but the rewards can far outweigh the effort required to avoid bankruptcy.  Some people attempt to make these life changes on their own, but a bankruptcy attorney can assist you in many ways you may be unaware are possible.

The reason you are feeling as if you are near bankruptcy is because you have too much debt compared to your income.  To reverse the process you will have to reduce your debt and maybe increase your income temporarily.  Some people get a part-time job for a while in order to earn extra money to pay off debt.  But there are many other steps you will need to

take which either lower your debt or create revenue in order to pay off debt.

When you meet with a bankruptcy attorney, the first thing you do is complete a financial evaluation form.  Sometimes, the attorney will see ways you can restructure your personal

finances in order to avoid bankruptcy.  For example, you can sell some assets that are not critical to your day-to-day life.  These assets may be any of your personal property.

In some cases, you will be advised to sell your home in order to eliminate a large mortgage payment.  You can then take the equity and purchase a smaller house or one with a lower payment.  You can also use the equity to pay off debt even if it means renting for a while.  Obviously, you need to reduce your spending however it is possible.  If you have a lot of unsecured debt, it is often possible to negotiate with the credit card companies to get lower interest rates so you are able to actually make progress towards paying off the balances.

A bankruptcy attorney can assist you with negotiating with your creditors.  For example, if you have loans it might be possible to restructure them in order to lower the payments.  This is true for your car payment also.  In other words, your attorney and you will go through each debt determine if there is a way to get your payments in line with your income.

One of the most important steps you will take though is to establish a budget and then develop the discipline to stick with the financial plan.  It may hurt to sell some of your assets, but if you are able to avoid bankruptcy the rewards are immeasurable.