Many people who are going through financial issues often think that filing for bankruptcy is their last option. Although there are various other options to help deal with the financial troubles you might be facing, filing for bankruptcy is not always a last option. There are situations where filing for bankruptcy is more helpful than other alternatives. Also, there are many types of bankruptcy that you can file for, depending on your financial situation and your specific circumstance.
If you are willing to sell properties and start over again, then you might consider filing for a Chapter 7 bankruptcy. This type of bankruptcy allows debtors to eliminate majority of their debts through liquidation of their assets so that their creditors will be paid back and then they can be free of debts. In order to for the Chapter 7 bankruptcy to begin, you have to first see if you are eligible. You have to pass a “means test”, otherwise the bankruptcy court would have to convert your case to a Chapter 13.
Chapter 7 bankruptcy works by gathering all assets and properties that fall under non-exempt properties and sell them off in order to pay for as much debt as they possibly can. The rest can then be eliminated or discharged. This can offer a better alternative if you don’t have enough to pay for a long-term repayment. Furthermore, such option can only cause even higher debts because of ongoing interest. It is a better option if you think you have enough assets and properties to sell and would want to start over a new life debt-free. Regardless, it is still important to first talk with your bankruptcy attorney, a debt settlement official, and a credit counselor to help weigh the best option out of your debts.Read More