Considering Bankruptcy for Debt Relief?
Bankruptcy is a federal court proceeding that allows debtors to solve their debt issues through liquidation or reorganization. Chapter 7 allows qualifying unsecured debt to be discharged while Chapter 13 restructures debt. In order to have debt discharged, debtors are required to get credit counseling by an approved provider.
Chapter 7 bankruptcy is commonly filed by consumers who have little or no assets but has specific exemptions that allow debtors to keep certain property such as a vehicle and other personal possessions. However, if you do have nonexempt assets that can be liquidated to pay down debt, you'll be appointed a trustee by the court.
If you are looking to reorganize your debt, Chapter 13 bankruptcy allows your debt to be restructured into a monthly payment. Debtors make monthly payments within a set time frame, usually 3 to 5 years.
Bankruptcy allows debtors to get a fresh start with their finances. If you are eligible to file Chapter 7 you may have your debt forgiven or discharged. There are certain debts that cannot be discharged such as alimony and back child support. State laws may vary when it comes to exemptions so it is important to consult with a bankruptcy attorney who can review your situation to help you determine if bankruptcy is the right solution for you.