Be honest. No one wants to file for bankruptcy, but sometimes, when all else fails, it is the only solution. You need to start fresh, clear your debts, and get on track toward financial recovery. It is important to know which type of bankruptcy best suits your situation, and which one will do the least damage to your credit rating. Chapter 7 bankruptcy is one of the most powerful debt relief options available, giving people drowning in debt a fresh start.
Why Chapter 7?
Before you decide to declare bankruptcy, it is important to understand how each type works and how each benefits your situation. Chapter 7 bankruptcy offers several protective features to debtors.
Automatic Stay Protection
As soon as the case is filed, an automatic stay goes into effect. The stay essentially bans creditors from most collection actions, so you won’t be getting any more annoying phone calls from creditors and collection agencies.
Once Chapter 7 bankruptcy is filed, creditors cannot garnish your wages. Your future paychecks are safe! No worries. The necessities of food and shelter will not be impacted. This is particularly important for families with children who may be just getting by. Without future wage protection, they could find themselves homeless.
The ban against most creditors is permanent. Only certain debts, such as court-ordered child support or alimony, and some taxes owed are not erased.
Keep Most Of Your Property
Exemptions protect most typical assets like clothes, furniture, cars, and tools of the trade. A creditor cannot demand that you sell off everything to pay up.
There is no shame in filing for bankruptcy. As society changes, we are regularly burdened with unplanned financial obligations. It is easy to get overwhelmed. The issue not only applies to individuals. Huge corporations consistently declare bankruptcy. In 2020, corporate filings were up 35% over 2019, and that was in a thriving economy. It is only fair that individuals should have the same opportunity to rid themselves of crushing debt and start fresh.
Which Debts are Wiped Out with Chapter 7?
Filing Chapter 7 bankruptcy wipes out most debt, including credit card debt, medical bills, and personal loans. Your obligation to pay these types of unsecured debt is eliminated when the bankruptcy court grants you a bankruptcy discharge.
What About Student Loans?
Thousands of students are buried in educational loan debt, so we get this question all the time. Most debtors won’t be able to discharge student loan debt in Chapter 7 bankruptcy. However, if you can prove that repaying your student loans would cause undue hardship, you may be able to get them discharged. An experienced bankruptcy attorney can walk you through this process. Do you live in Minnesota? Are you considering filing bankruptcy? Are you buried in Student Loan Debt? Hoverson Law Firm is a 30-year specialist in helping clients resolve financial problems. Let us help you. Call now at (612) 349-2728.