When you have a large amount of debt that you are unable to pay, you have limited options to choose from. For many people who have considered all of their debt relief options, bankruptcy is the final option to turn to. As a Chapter 7 bankruptcy lawyer can elaborate further on, bankruptcy is not a solution for all of your problems. It simply allows you to discharge your eligible debt and gives you a fresh start. Chapter 7 bankruptcy is just one common type of bankruptcy that many people file for.
Both individuals as well as businesses can file for Chapter 7 bankruptcy. People who intend to file must pass a means test, and they must be at or below a certain income level to qualify. However, there are exemptions for certain individuals, so if you would like to learn more about them you can speak to a bankruptcy lawyer and they can determine if you qualify or not.
A big difference between Chapter 7 and other types of bankruptcy is that most types of debt can be discharged in just a few months. Most types of unsecured debt can be eligible under Chapter 7 bankruptcy, which includes medical bills, credit card debt, loans. The types of debt that cannot be discharged include student loans, taxes, payments for damages in personal injury accidents, and spousal support payments.
Benefits of Chapter 7
In contrast to Chapter 13 bankruptcy, Chapter 7 bankruptcy is the fastest form of bankruptcy. Debtors can have their debt eliminated in as little as three to five months. Unlike Chapter 13, there is no limit on the amount of debt. It offers a clean slate for debtors to move on from their debt and start over. They are not subject to a repayment plan as well, so they don’t have to be concerned about keeping track of further payments to make.
Other Things to Consider
Before you move forward with the bankruptcy process, there are other things that you should keep in mind. Think of the long-term consequences and how you will prepare to improve your credit score again. You will need to be ready to come up with a strong financial plan so that you are able to recover from the consequences of filing for bankruptcy.
It’s important to have all the information you need prior to deciding to file for bankruptcy. To learn if Chapter 7 bankruptcy is right for you, schedule a consultation with a trusted lawyer now.