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Bankruptcy filings require open, honest dialogue

A chapter 7 filing can apply to individuals or businesses. In both situations, property and/ or possessions are liquidated to satisfy any non-exempt liens and debts. This is merely a part of what a chapter 7 filing does for an individual. At the heart of all bankruptcy filings, the general purpose of filing for bankruptcy is to relieve one's self of severe debt and to stop creditor harassment. People only think about filing for bankruptcy when their debt has gotten to such a point that something extreme needs to be done. There is nothing much more extreme than bankruptcy because of all that goes with it. For instance, a chapter 7 filing is on your credit record for 10 years. This may adversely affect future financial activities.

Now, it is important to note that a filing of this sort is legal in nature. This means that the law governs all that is required to file for bankruptcy. To file for bankruptcy, the filer has to have everything in order with respect to all affected property, debts, liens, and the like. As mentioned previously, not all outstanding debts are apart of the liquidation process in a chapter 7 filing. Some debts are exempt, meaning that bankruptcy cannot touch them. These exempt items are clearly defined at the beginning of the process. Once that is declared, you will have a better idea of what is what with respect to monies that have to be paid out.

Whether you are filing a chapter 7, a chapter 11, or a chapter13, because this filing is legal in nature, the courts do not take kindly to any type of deceitful actions regarding a filing. A filing must be done truthfully and honestly and all cards must be put on the table, so to speak. Concealing property, making a false filing, or anything else that can be deemed by the courts as improper is against the law. As such, there is a trustee appointed to each bankruptcy case that can challenge a filing if he or she deems it to be abusive. Honesty in bankruptcy, regardless of the type of filing, is paramount.

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