For consumers, one of the two main bankruptcy options is known as Chapter 7 bankruptcy. It has a streamlined, simple process that allows you to liquidate assets, pay off some of the debt that you owe, and then ask for the rest of the debt to be forgiven.
If you’re debating which type of bankruptcy to use or if you’re still trying to decide if bankruptcy is right for you at all, it’s important to consider some of the benefits of Chapter 7 bankruptcy for those who qualify.
Chapter 7 does not put you in a repayment plan
Other types of bankruptcy, like Chapter 13, essentially reorganize your debt and then create a repayment plan. Chapter 7 does not. Once your debt is eliminated, you do not have to make any future payments. It’s all behind you.
It focuses on a fresh start
The goal of Chapter 7 really is to provide you with a fresh start and a debt-free future. Your financial issues, which may not be your own fault at all, should not dictate the course of your entire life. Chapter 7 lets you start over. It gives you a clean slate. You can focus on making wise financial choices moving forward and really change your future.
It does give you exemptions
You’re not going to lose everything in Chapter 7. There are many exemptions that you can use to protect the assets you need. You may be able to keep the tools of your trade, for instance, or your family home. Again, this is due to the focus on starting fresh. If you lost everything, you’d just quickly get into debt again and bankruptcy would be useless. With exemptions, though, you really can keep what you need, liquidate what you don’t, and enjoy the benefits of that clean slate.
Is this the right option for you?
Do you think that Chapter 7 sounds like the solution that you’ve been looking for? Are you excited to get a fresh start? If so, just make sure you know precisely what legal steps you’ll need to take.