In the United States, bankruptcy is designed to help those who cannot pay their debts. It helps them start fresh, either through liquidating their assets or by creating a repayment plan that allows them to pay what they owe over time.
Individuals usually have the option of choosing between Chapter 7 and Chapter 13 bankruptcy. Federal courts always handle these cases, since they are handled based on federal law.
If you’ll lose your assets in Chapter 7 bankruptcy, is it worth it?
As someone who is now considering Chapter 7 bankruptcy, you should first realize that you won’t necessarily lose everything during bankruptcy. Even if you do go through liquidation bankruptcy, you’ll likely have many exemptions that you can use to protect your assets.
The goal of any bankruptcy is to help you get a fresh start. Taking away everything would not help reach that goal, which is why there are exemptions available.
If you can’t make ends meet and are falling behind on bills, it’s time to consider a Chapter 7 bankruptcy.
What happens if you can’t qualify for Chapter 7 bankruptcy?
If you are earning wages and won’t qualify, you may want to look into Chapter 13 bankruptcy instead. With it, you set up a repayment plan that you pay on for three to five years, depending on the program assigned by the court. At the end, any qualifying debts that remain are discharged.
Both Chapter 7 and Chapter 13 bankruptcy can be great options for those dealing with financial issues. Our website has more on each, so you can learn more about them.