When you find yourself in some type of financial trouble, you try and find ways to get back on financial track. You may want to turn to credit counseling, or perhaps consider debt consolidation. And while those are good ways to help you regain control of your finances and your budget, it's important that you take a look at how bad things are to begin with. If you feel as though debt consolidation or credit counseling really won't help you, you may want to consider filing for Chapter 7 bankruptcy. This article will give you a brief overview on why Chapter 7 may be the right option for you.
Discharge Qualified Unsecured Debt
One of the advantages to filing for Chapter 7 bankruptcy is the fact that you can discharge all of your qualified unsecured debt. The term "qualified" is used become some debt, like tax debt, child support ordered by a court or student loans, cannot be discharged under bankruptcy. But you can discharge your credit card bills, as well as unsecured personal loans.
Keep Exempt Assets
When you file for Chapter 7 bankruptcy, you will need to sell off a lot of your valuable assets. The money received from these assets will be used to pay off, or at least pay down some of your unsecured creditors. You are allowed to keep the equity in your home, and some other exempt assets as well, such as clothing and the furniture in your home. This is to allow you to be able to have a fresh start.
Another big advantage to filing for Chapter 7 bankruptcy is to obtain an automatic stay from the creditors. This means that once the petition has been filed, your creditors must immediately cease and desist all collection activity on you. This is beneficial if you are being continuously harassed by creditors. This does not mean that you won't have to eventually pay at least some of the debt off, but they have to stop trying to collect the debt from you, and instead turn their attention to the appointed trustee in this case.
If you are considering filing for bankruptcy, talk with a bankruptcy attorney to discuss your options. You may not qualify for Chapter 7 and may have to turn your attention to Chapter 13. Talking with an attorney like one from Morrison & Murff and going over your finances is the best way to make this important decision.