Filing for Chapter 7 bankruptcy is an opportunity that is not afforded to all Americans. Why? This form of debt relief is extreme. The rights of creditors to pursue the debts that they are owed are severely curtailed during a successful Chapter 7 bankruptcy action. In fact, most unsecured debts of a Chapter 7 filer are wiped out at the conclusion of a successful bankruptcy case. Because the law seeks to balance the rights of creditors with the needs of consumers who are struggling under the weight of crushing debt, this form of debt relief is reserved for those who are thought to need it the most.
Essentially, if you don’t make a great deal of income and it is unlikely that you will be able to repay your debts anytime soon, you will likely qualify for Chapter 7 bankruptcy. If you do not qualify to file for Chapter 7 bankruptcy relief, you may benefit from exploring the process of filing for Chapter 13 bankruptcy relief as an alternative form of debt management.
The Chapter 7 Bankruptcy Process
As an experienced bankruptcy lawyer – including those who practice at The Law Offices of Ronald I. Chorches – can confirm, filing for Chapter 7 bankruptcy can provide individuals and married couples filing jointly with an excellent opportunity to achieve a fresh financial start. This is because, when one’s debts are wiped out, one can use the income at one’s disposal to meet basic needs and to pay down debts that are not dischargeable during the Chapter 7 bankruptcy process. If you file for Chapter 7 bankruptcy relief and are careful about the debts you run up moving forward, you may find that your debt load never evolved in ways that are unmanageable again.
Some people who struggle with debt hesitate to file for Chapter 7 bankruptcy because they are worried about what doing so will do to their credit. If you file for bankruptcy, your credit score will take a hit temporarily. However, if you pay your bills on time moving forward you may find that you can rebuild your credit score far faster after achieving a fresh financial start than you could if you remained burdened by overwhelming debt. It is additionally important to note that unless you own luxury property, chances are that you were not at risk of having your assets sold by the trustee assigned to your case in an effort to help repay your creditors.