For those in Arkansas who may be contemplating the possibility of bankruptcy as a way to quickly eliminate large amounts of unsecured debt, it’s wise to get an understanding of how the procedure works. Those who go forward well-informed will be more relaxed and positive by knowing the meaning and impact of the various steps. Generally speaking, a personal bankruptcy for those with large amounts of unsecured consumer debt, such as credit cards, unsecured personal loans, and medical bills, is the strongest, quickest and most effective debt relief remedy available.
This article is a brief overview of Chapter 7. The other main consumer remedy, Chapter 13, is taken up in other blogs. Chapter 7 is the crucial tool that is used to eliminate unsecured credit card balances and medical bills, along with any other unsecured debt not burdened by collateral. It works quickly and wipes out the unsecured debt permanently.
This is not generally for those with a few small bills. The remedy extinguishes large amounts of credit card and medical bills, and should be used by those struggling with relatively large and stifling debt loads. The remedy is provided for by federal law and is recognized and enforced where necessary by the government. When compared to every other debt relief remedy, a personal Chapter 7 bankruptcy is the only method that assures a fresh start in generally just a few months, and wipes out forever all unsecured credit card obligations, and other debt, without a payment plan.
Chapter 7 calls for the liquidation of a debtor’s assets and distribution of the proceeds to the creditors. However, certain exemptions in the law allow generally the retention of cars, furnishings, retirement plans and a range of miscellaneous belongings. Additionally, in many instances the debtors can retain their residence in a Chapter 7. The details of these debt relief exemptions in Arkansas, with specific reference to your own situation, are best learned in consultation with a recognized consumer bankruptcy attorney.
Source: Examiner.com, "Quick Guide: Types of bankruptcy", Sarah Heller, Aug. 6, 2014