The Option of Filing For Chapter 7 Bankruptcy to Get Out of Debt
Filing for bankruptcy is usually not on the average person’s to-do list, but it is something that may need to be done. There are times when people find themselves dealing with so much debt that they simply cannot afford to pay off. If they are dealing with a serious financial burden, filing bankruptcy could be the most suitable option.
A person may use numerous credit cards with the intention of paying the minimum on those cards. However, high interest rates and other types of debt could quickly make it even more difficult to pay everything off within a reasonable amount of time. Sometimes the best way to get relief from such serious debt is to file bankruptcy.
The Chapter 7 Filing Option
Those who are dealing with debt may have a few options when it comes to dealing with their debt. They may be able to file either chapter 7 or chapter 13. Those who typically earn a decent amount of money are often told they must file chapter 13 where they would focus on making smaller payments to eventually pay off what they owe. However, not everyone is eligible for filing this way.
The chapter 13 filing process would be available to those with regular and steady income. It would be an option that allows those people to make smaller payments as a way of avoiding financial difficulties now and in the future. People who are unemployed or do not have steady income would be directed to file chapter 7.
What Is It Like to File This Way?
If you choose to file chapter 7 bankruptcy, you would be able to sell some of your possessions to help pay off your debt. If you own additional properties or vehicles, it may be ideal to sell them so that you could put the money directly toward your debt. You may be concerned that you would have to sell all of your belongings, but that is not true because many of those necessary items are exempt. Because most of your belongings would likely be exempt, filing this way could be the absolute best decision for you to make.
This method of filing is ideal for people without secured debt, too. For example, if you rent a home instead of owning a home or paying out a mortgage each month, you may prefer filing this way. It would be possible to erase the debt you owe without losing your home as well as your important belongings.
Understanding Debt
Although filing bankruptcy could potentially help you get out of debt, it is not a solution for those who have student loan debt or child support debt. If you do have overdue student loans or child support payments to make, filing for bankruptcy would not help you erase that debt. It is the kind of debt you would still have to deal with.
The good news is that you can still file chapter 7 if you have a mixture of debt. You could erase some of the debt you are dealing with, which may make it a bit easier for you to get up-to-date with your student loans, child support payments and other forms of debt that would not be erased during this process.
It is important to understand that the repaying debt with the chapter 13 plan could take years. However, things would not take nearly as long if you were to go with the chapter 7 option. As long as you are eligible for this particular option, it is something you should consider simply because it could help you avoid any additional financial stress.
