While it could be slightly embarrassing to go through a proceeding like filing for Chapter 7 bankruptcy protection, sometimes it's an essential evil that just needs to be taken care of. No one likes to admit that they're heavily into debt and can't pay their bills. Unfortunately, people just need help sometimes to get out of their dire economic straits, and the only way to do so is by filing for personal bankruptcy.
If an individual is completely incapable of paying cash to any of the creditors that they owe, it'll be necessary for them to apply for Chapter 7 bankruptcy. Chapter 7 liquidates all of a person's assets so creditors can get the money that they are entitled to. This usually means items like a house, car, and/or boat are all eligible items that are available for instant liquidation if the court deems it essential to do so. You might, possibly, find yourself out of a home if you're that far into debt. This can be a scary proposition, but tis one that's essential so all of the harassing telephone calls and letters through the mail stop.
Part of filing for bankruptcy is the required counseling services that are assigned to an individual before the process is able to be finished. Chapter 7 and Chapter 13 are both forms of personal bankruptcy that could be filed, but the type of counseling received is slightly varying. This is due to the fact that people filing Chapter 13 are usually not as financially impaired as those who are forced into Chapter 7. There is a payment plan to creditors associated with Chapter 13, so a not the same kind of counseling is necessary compared to the person that is so far in debt that their possessions need to be sold immediately in order for their bills to be paid off.
Just by filing for bankruptcy, you're agreeing to credit counseling that is assigned by the court overseeing your case. The credit counseling agencies are normally those that the courts have worked with before to establish procedures as to what they expect the person to comprehend once they're finished with their counseling sessions. Before the legal proceedings involved with bankruptcy are able to move forward, the court will need to see that you attended credit counseling and are making a concerted effort to implement the lessons that you have learned from your sessions with your counselor.
In their most simple forms, credit counselors are advisors as to what your choices are going to be once you file for and get OK'd for Chapter 7 bankruptcy protection. The job of a credit counselor isn't to talk you out of filing for bankruptcy, but they are there to discuss other potential options with you so that you don't have to go through everything associated with applying for bankruptcy. A credit counselor will also make known exactly what your priorities are going to be once you file, and they'll make sure that you comprehend the procedures that are involved with a traditional Chapter 7 filing.
