Chapter 7 bankruptcy offers debtors the fresh start that they need when they are struggling under a mountain of debt. If you successfully file for Chapter 7 bankruptcy, you could end up with many of your debts discharged.
Not everyone qualifies for Chapter 7 bankruptcy. You must have an income below a certain amount to pass the means test. Otherwise, you would need to go through the Chapter 13 restructuring process, which means that you still need to repay the debts, albeit with different payment terms.
The debt discharge comes at a cost. Certain assets must be forfeited. The proceeds would be used to pay your creditors. They would receive just a fraction of what you owe them. Bankruptcy laws protect certain assets in the process. For example, there is a homestead exemption that could allow you to keep your home. Your car may also be protected up to a certain value.
Once you have concluded the bankruptcy process, certain debts will be erased entirely. For example, your medical and credit card debts could completely go away. However, student loan debts may be excluded entirely from the bankruptcy process.
A Chapter 7 bankruptcy can be very helpful for your financial future. You may have gotten yourself into a difficult situation, and you do not know how to handle it. Once you go through the bankruptcy process, you can begin to start your life again. You would have to make some sacrifices to declare Chapter 7, but they may be worth it.
The attorneys at Bountiful Law can advise you whether bankruptcy makes sense for you and what type you should consider. To speak with an attorney, you can send us a message online or call us today at 425.517.1653.