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Kind of in shock!!

October 9th, 2008 at 04:04 pm

I am kind of in shock right now. I just found out that a very well to do couple that I know is filing chapter 7 bankruptcy. I am not quite sure what chapter 7 means cause I have never known anyone to declare bankruptcy.
Can anyone enlighten me about chapter 7?

Posted in Uncategorized | 3 Comments »

3 Responses to “Kind of in shock!!”

  1. aevans1206 Says:
    October 9th, 2008 at 04:21 pm 1223569274
    1223569274

    I believe chapter 7 is where all debt is basically discharged. Your friends will relieve themselves of all of their debt (aside from the house), but will live for a few years with no credit. Eventually, things will look up for them. For many people, bankruptcy is the best option. It allows them to start anew.

    I think chapter 11 or 13 is where you go on a payment plan to pay at least some of your debt. You are required by law to get rid of luxuries such as cable (maybe even internet) and stick to a strict budget.

  2. campfrugal Says:
    October 9th, 2008 at 04:36 pm 1223570212
    1223570212

    That is pretty close, except Chapter 7 does not allow you to discharge things like property taxes or income taxes owed; or debts that are state mandated - like driver's responsibility fees. Also, for Chapter 7, you have to show all assets and sales that have happened within the last 2 years, at least in our State of Michigan; and No, I have not filed for bankruptcy, I just know a lot of attorneys and used to work for them.

  3. Ima saver Says:
    October 9th, 2008 at 05:02 pm 1223571720
    1223571720

    Thank you for letting me know.

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