When it comes to debt relief, one of the primary options is a Chapter 7 bankruptcy. Chapter 7 bankruptcy has many benefits for people who cannot afford to pay back what they owe. As a liquidation bankruptcy, it may require you to give up a portion of your assets for sale. However, there are exemptions, so that you don’t have to start over from scratch — and many people end up giving up nothing at all.
Many people worry about using Chapter 7 bankruptcy due to the potential for losing assets. The reality is that people who qualify for Chapter 7 bankruptcy can protect a fair amount of their assets. Non-exempt assets must be liquidated, but exempt assets, which could include a personal vehicle up to a certain value, necessary clothing or others, are protected.
Chapter 7 bankruptcy lets you start over with support
Another big benefit of Chapter 7 bankruptcy is that you have to go through credit counseling through an approved credit counseling agency. Why is that a good thing? It helps you better understand your finances and make plans to avoid this kind of situation in the future.
Personal bankruptcies are complex, and there are several kinds you may be able to use to help get yourself out of debt. While the bankruptcy is likely to impact your credit in the short term, keep in mind that getting out of debt now will help you free up your finances and get into a better financial position moving forward. Your attorney will talk to you more about this and other debt-relief options that you may be interested in trying.