An individual filing bankruptcy can file under two different chapters: Chapter 7 and Chapter 13. Most bankruptcy

petitions are filed under Chapter 7. A Chapter 7 bankruptcy relieves the debtor of most of their debts and gives them an opportunity to start again in building and

maintaining credit.

Although the laws have changed significantly over the past several years regarding Chapter 7 bankruptcy, the purpose of filing Chapter 7 has not changed. Most people who file

Chapter 7 bankruptcy have found themselves with insurmountable debt that they are unable to pay off. In many cases, the debt has been accumulated on credit

cards that often have high interest rates. As the individual struggles to pay even the minimum balance due, the credit

card balances continues to rise, leaving the debtor in a financial quandary.

If an individual loses their job, gets divorced or is hospitalized while already having high credit card debt,

the result can be financially catastrophic. Many individuals who file a Chapter 7 bankruptcy earnestly want to pay off their debts, but have no viable means in which to do so.

Someone who incurs $50,000 in debt can easily spend the next twenty years paying it off, even at little or not

interest.

For this reason, thousands of people each year choose to file Chapter 7 bankruptcy. A Chapter 7 bankruptcy must be

filed in Federal bankruptcy court through a bankruptcy petition. Many people engage an attorney to take care of

this matter for them.

Once the Chapter 7 bankruptcy petition is filed, the debtor is protected from creditors. During this period, which usually lasts for 45 days, the individual must tell any creditors who call that he or she has filed Chapter 7

bankruptcy. Once a creditor learns that an individual has filed Chapter 7 bankruptcy, they are prohibited by federal law for continuing to call for money, or from instigating a

lawsuit.

After the specified time period, the individual who files a Chapter 7 bankruptcy will have to attend a hearing at

bankruptcy court. This is normally done in a room with the individual, the trustee (who is the person assigned to

eliminate the debt and who is an officer of the court) and the individual\'s attorney. The trustee generally asks the debtor some questions in a fifteen minute process. After

this, the trustee makes a recommendation to the bankruptcy court to discharge the debt. A discharge

statement is then mailed to the individual several months later.

During the hearing, creditors may appear on their behalf to argue against the bankruptcy. This rarely happens when

the creditors are lending companies and banks, as is the case with credit card debt. In most cases, the Chapter 7

bankruptcy is quite easily accomplished without any protests from creditors.

Chapter 7 bankruptcy is sometimes the only way out for individuals who have acquired large debts that they will

never be able to pay. For this reason, most people who file bankruptcy, do so under a Chapter 7 bankruptcy petition.

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