Chapter 7 bankruptcy is a good solution to debt woes for many people. If you don't have the income to support the debt you have or are out of the job, then this could be the right choice for you.
With Chapter 7 bankruptcy, you will need to meet the requirements set by the state. However, this is relatively easy to do if you have debts that far outweigh your assets and income.
When do people choose Chapter 7 bankruptcy?
Chapter 7 bankruptcy is sometimes a choice when people need to pay down large medical bills but don't have any way to do so. It can be a solution when credit card debt is so excessive that there's no way to make payments on time. It can even be beneficial when your mortgage is underwater.
Chapter 7 bankruptcy is known as liquidation bankruptcy because it can be required to sell some of your belongings. However, the number of items you have to give up may pale in comparison to the amount of debt you'll give up. For instance, if you have to sell your second vehicle for the bankruptcy but have over $100,000 in debt forgiven, then you would probably agree that it's a great trade for your financial security moving forward.
Your attorney will talk to you more about Chapter 7 and other forms of bankruptcy that could be right for you as well as other options you may not yet have considered. It's important to get a solid education in your options before choosing the method to reduce and eliminate your debts.