Pros & Cons of Chapter 7 Bankruptcy

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Chapter 7 bankruptcy is when a debtor turns over their non-exempt assets to a bankruptcy trustee in order to pay off creditors, but the downside is that a person with a number of non-exempt assets may not want to lose them. Contact a bankruptcy attorney to find out the best way to approach Chapter 7 bankruptcy with help from a certified civil mediator in this free video on bankruptcy and money management.

Part of the Video Series: Bankruptcy & Foreclosure
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Video Transcript

You are having difficulty meeting your monthly obligations and, in fact, you're running out of income long before you run out of month, and you've heard about filing a bankruptcy, and specifically, a Chapter 7 bankruptcy. Hello, I'm Robert Todd, and I'm here to answer the question: What are the pros and cons of filing a Chapter 7 bankruptcy? Well, first of all, the Chapter 7 bankruptcy is sometimes called the straight bankruptcy because it's the one where liquidation occurs. What happens is you, as the debtor, turn over to the bankruptcy trustee your non-exempt assets and the bankruptcy trustee converts those non-exempt assets into cash to pay off the creditors. And what is left then goes to you and this usually takes between four to six months. The downside is if you have a lot of assets that are non-exempt and you wanted to keep them, this might not be the way to go. But the best analysis if you have a question in this area of the law is to contact a bankruptcy attorney to determine which of your assets are exempt and which of your assets are non-exempt. I'm Robert Todd, and thank you for watching.


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