When you are facing large amounts of debt, you may be looking for options to get your finances back on track and relieve some of your stress. Filing Chapter 13 or Chapter 7 bankruptcy may be a solution to your problems.
If your income is below your state’s median level and you cannot afford to repay your debts, Chapter 7 bankruptcy can be the best option for you. If you’re not certain, a bankruptcy attorney can help you determine what form of bankruptcy to apply for, and what you need to know about the process.
If you choose to file for Chapter 7 bankruptcy, you may experience many benefits, including the following.
Get rid of your debt
With Chapter 7 bankruptcy, you can quickly eliminate your debt by paying off your bills or having them discharged. Unlike a Chapter 13 bankruptcy where you pay off your debts under a payment plan, under Chapter 7, you are not obligated to repay qualifying debts. These can include your credit card balance, personal loans, and other unsecured debts. However, certain forms of debt cannot be discharged. This can include child support, spousal support, taxes, and other forms of secured debt.
Prevent creditors from harassing you
Are creditors hounding you to repay your debts? This can include countless phone calls, letters, or even showing up at your home or work. Creditors might also be taking steps to repossess your property or garnish your wages. When you file bankruptcy, creditors must stop contacting you and cease steps to get the money you owe.
Avoid having to sell off all your possessions
While Chapter 7 bankruptcy can require you to liquidate some of your possessions to pay off your debt, you can use exemptions to protect property that means the most to you – like your home, car, or other items that are necessary to live your day-to-day life.
Obtain credit sooner
When you have high amounts of debt, your credit score can be harshly impacted, preventing you from getting new lines of credit, and possibly even getting a job if they check your credit report. Filing Chapter 7 bankruptcy will show up on your credit report, but you will be able to start rebuilding your score over time after your debts are discharged. According to FindLaw, you might be able to get new lines of credit one to three years after filing bankruptcy. However, it’s important to note that these lines of credit can be at a higher interest rate.
Get caught up on your mortgage
If you have fallen behind in your mortgage payments, filing for Chapter 7 bankruptcy can buy you time to get caught up on your payments. Your debt will not be forgiven, but you can avoid foreclosure by restructuring your finances and making the back payments.
Address your car loan
When you are behind on your payments, you could be facing repossession. Filing Chapter 7 bankruptcy can offer you options. You can address the missed payments as part of your bankruptcy. You can also work with your bankruptcy attorney or your lender to surrender your car, create a payment plan, or other options. You can also consider paying the cash value of the car if it’s worth less than what you owe on your loan.
Contact an Attorney
If you are sitting on mounds of debt and want to file for Chapter 7 bankruptcy, it’s crucial to hire an experienced attorney to help you through the process and get the money you are owed. Don’t let debt ruin your life. Call (405) 529-9377 for a free case review. We are ready to help you get the financial relief you need!