Bankruptcy can be confusing. From the multiple chapters you can potentially file under to the many myths and outright lies about what filing for bankruptcy actually entails it can challenging to make sense of it all and come to the best decision for you and your family. If you’re struggling with large debts and you don’t think you will be able to pay your way out from under them, you may want to consider filing for bankruptcy in order to gain relief from your debts.
What Are Chapters of Bankruptcy?
If you’ve read a story about a celebrity or business filing for bankruptcy, or have a friend or family member who has, you’ve likely heard talk of chapters of bankruptcy but may be confused about what that means. The easiest way to think of it is that each chapter represents a different way you can file for bankruptcy, each with their own requirements for who or what entities are eligible and for what happens upon filing.
What is Chapter 7 Bankruptcy?
Chapter 7 is one of the most well-known forms of filing for bankruptcy. It is a personal filing option in which instead of a payment plan being agreed to which mitigates the filer’s debt, the debt is discharged. A trustee overseeing the bankruptcy may collect and sell off non-exempt assets of the debtor in order to partially pay of creditors.
Will I Lose All of My Property?
The thought of losing precious belongings is one of the biggest fears many people have when it comes to bankruptcy. While it is true that you could be subject to the sale of some of your property it is unlikely to occur. In 99-percent of cases, the debtor is not made to sell off any of their property.
How Do I Know if I Am Eligible to File?
The most challenging thing about filing for bankruptcy for many who are struggling with their debts is determining if filing would help them or if they are even eligible to file at all. The best way to determine if chapter 7 bankruptcy in Flint, Michigan is an option for you to make your debt situation better is to sit down with an attorney with a specialization in bankruptcy law.
An attorney can review your situation with you by assessing the state of your finances and your debts, as well as any assets you own which could be at risk upon filing. During this consultation, you can determine if it makes sense for you to file for bankruptcy or if you would be better served trying to find alternative options like a payment plan with your creditors.
Will Filing for Bankruptcy Ruin My Credit?
Your credit score plays a big role in major purchases in your life, determining your eligibility and interest rates when applying for new lines of credits like a new credit card or a home or car loan. While a chapter 7 bankruptcy does remain on your credit report for 10 years, it’s important to remember that the effects of your credit crunch will often remain for seven. It is possible that the short term effects on your credit will be outweighed by the benefit of being able to begin establishing signs of strong credit, like reduced debt levels and a history of making payments on time.
It can feel like an unmanageable task to try to wrangle a debt which has been spiraling out of control. Chapter 7 bankruptcy may provide the relief that you need to get back on your feet and start rebuilding your credit. If you’re not sure, reach out to a professional today and see if you can benefit from filing.