If you are dealing with debt, one of the things you may want to consider is going into bankruptcy. Bankruptcy is usually a good idea for those who have tried other debt-resolution options, such as consolidating or negotiating down debts, but that still have significant debt without any foreseeable way to pay them off in a reasonable amount of time.
Those who qualify based on their income or hardships may want to consider Chapter 7 bankruptcy, which is a form of bankruptcy that liquidates nonexempt assets to repay what is owed. Many people who go into this kind of bankruptcy do not lose anything thanks to the exemptions provided by the government. In other cases, there may be some minimal asset losses, but that is with the intention of bringing you to a more financially viable state.
During the bankruptcy process, you will have to disclose all of your assets. You will also need to look at your income and determine if you can afford to repay any of the debts that you have disclosed. You’ll negotiate with creditors and take steps to resolve debts by asking that the court discharges them due to your financial situation.
If you qualify for Chapter 7 bankruptcy, then the court will go through your assets to determine if any can be liquidated. After liquidation, the court will then be able to move on to discharge any debts that qualify for Chapter 7 bankruptcy protections.
What happens if you go through a Chapter 7 bankruptcy successfully?
When you emerge from Chapter 7 bankruptcy, you will be given a discharge of debt. This discharge is what relieves you of any personal liability for the debts that are being discharged by the court.
Did you know that some taxes might be able to be discharged? In some cases, even loans, like student loans, might be able to be discharged if you can show significant hardships. Since not every case is the same, that’s why it’s so important for you to work with someone familiar with Chapter 7 bankruptcies and the exemptions or exceptions that may apply to your case.