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What will happen after filing for Chapter 7 bankruptcy?

For those in Florida for whom the financial outlook is dire, filing for personal bankruptcy is a viable option to secure fast and lasting debt relief. Many, however, are uncertain what to expect when considering this option, and can fall victim to misinformation on the subject. The following tips are offered in the hopes of educating Florida consumers about the Chapter 7 bankruptcy process, and what to expect once the paperwork is filed.

One thing that concerns many potential filers is the risk of their financial information becoming public knowledge. While it is true that bankruptcy records are part of the public record, the outcome of an individual’s personal bankruptcy is not published. These records can be accessed at the courthouse where the bankruptcy is filed, but very few records are looked into in this manner, unless the filer is a celebrity or public figure. Even one’s creditors are unlikely to look into individual bankruptcy filings.

Another concern is that the process of filing for personal bankruptcy will lead to the loss of all of an individual’s assets. In reality, however, there are certain types of property that are excluded from loss during bankruptcy. Examples are social security benefits, retirement savings, and college savings accounts held for one’s children. In addition, assets gained through a personal injury claim can be protected from loss during bankruptcy. State law further defines which assets can be included as exemptions within a Chapter 7 filing.

When considering Chapter 7 bankruptcy as a debt relief option, it is essential to understand the full range of protections offered under this financial tool. As with any significant decision, moving forward fully informed is the best course of action. While there are certainly some negative aspects of going through bankruptcy, Chapter 7 is a powerful tool for those in Florida who are in need of aggressive and lasting debt relief.

Source: Westfair Communications, “Column: Bankruptcy a viable option for some“, Stephen P. Wright, May 27, 2014

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