Finances are not easy to manage. Sometimes, the harsh realities of life throw curve balls that can send your financial wellbeing into a spiral. In these stressful situations, it can seem like nothing will help to bring you above water once again. There are, however, methods of dealing with massive debt and financial concerns that can help get you back on your feet. Chapter 7 bankruptcy is one such option.
Filing for chapter 7 bankruptcy can remove much of the pressure of crushing debt but also has aspects that need to be considered before hastily making the decision. While there are many types of debt that can be erased during the process, this involves giving up property in order for that debt to be eliminated. There are two different types of property in these situations – exempt and non-exempt.
Property that is non-exempt includes items such as second homes, collections of valuable goods such as coins or art, family heirlooms, cash, stocks, bonds and other investments, a second car and more. Exempt property is typically seen as more crucial to the survival and wellbeing of the person filing for bankruptcy. These items include vehicles (up to a certain value), reasonable clothing, appliances, pensions, public benefits such as welfare and more.
Successfully filing for chapter 7 bankruptcy can certainly change a person’s life for the better, but it comes at a cost. Not only will property be lost, but credit scores will be severely affected for up to a decade. Still, the option can provide a clean slate for those struggling with debt and should be carefully considered as a viable choice. Seeking the assistance of an experienced attorney can help those in such situations proceed with a levelheaded and strategic plan.