There are several debt relief options available to help you overcome past financial decisions and ultimately enjoy a brighter financial future. One of these options is filing for Chapter 7 bankruptcy. Like all debt relief options, while the option of filing for bankruptcy will be ideal for some people, it will not be right for everyone. Taking the time to ask yourself the following questions can help you to determine whether or not Chapter 7 bankruptcy is right for you.
Do You Have A Large Amount Of Unsecured Debt?
Chapter 7 bankruptcy deals exclusively with unsecured debts. These are all of the debts that you accumulate without the use of collateral. For instance, your credit card bills will be considered unsecured debts since you were not required to supply the credit card company with collateral before your card was issued.
When filing for Chapter 7 bankruptcy, you will have the opportunity to discharge many of your unsecured debts. However, other types of debt, such as your mortgage, will still need to be paid unless you wish to lose the collateral that is attached to these debts. Consequently, individuals with a large amount of unsecured debt will often benefit most from choosing this debt relief option.
Do You Have Unnecessary Assets That You Wish To Protect?
There are some assets that are essential to your ability to remain self-sufficient. For instance, having a home and a vehicle may be essential to maintaining a simple lifestyle. However, having a large mansion and high end sports car are not essential.
Chapter 7 bankruptcy laws protect the assets that are essential to your ability to care for yourself and your dependents. Thanks to the property exemption laws that protect these assets, you will not need to worry about your creditors seizing the assets that you need to survive. However, any excess assets that are not protected by these laws will be seized by the court in order to help pay off your debts. Consequently, if you have a large number of assets that you wish to protect, you may find that filing for Chapter 7 bankruptcy is not the right choice for you.
A Final Thought
Filing for Chapter 7 bankruptcy can have a huge impact on your debts, your assets, and your credit. In order to ensure that this is the best debt relief option for your specific situation, it is always best to consult a qualified bankruptcy attorney like Morrison & Murff before deciding whether or not to file a petition with the court.