Signs That You Need To Consider Filing Chapter 7 Bankruptcy

In the past year, people around the world have felt the financial crunch of living through a global pandemic. In the United States, over 522,000 people filed for bankruptcy in 2020. Many of these people dealt with years of financial problems before making a decision to file for bankruptcy. If you are struggling to keep your head above water financially, then it might be time to consider bankruptcy. 

While filing bankruptcy is never an easy decision to make, it is often the best way to reduce the stress of dealing with problems like creditor harassment and overwhelming debt. Here are some signs you might notice when it is time to consider filing chapter 7 bankruptcy

Most of Your Debt is Dischargeable

If you are new to the world of bankruptcy, you are probably unfamiliar with what these laws allow and what they don’t. Certain types of debt cannot be discharged by a bankruptcy court. For instance, child support debts and student loans are considered debts that can’t be discharged with the filing of bankruptcy. There is some tax debt you can discharge, but there are various stipulations you have to abide by. 

If the majority of your debt comes from the sources mentioned above, then you may want to reconsider filing bankruptcy. However, if you feel like most of your debt is dischargeable, it is time to speak with a lawyer about filing chapter 7 bankruptcy. With the help of a legal professional, you can figure out what the bankruptcy filing process entails and how to properly file paperwork in your state. 

There are Assets/Wages You Want To Protect

Some people make the mistake of filing for bankruptcy before weighing all of their financial options. This can result in you losing a lot of assets in the process. If a person is deemed insolvent by the judge in a bankruptcy case, their creditors are not allowed to take legal action against them. By law, creditors aren’t allowed to take things like a person’s primary residence or Social Security check to settle their debts. 

If you have assets and earn a wage you want to protect from creditors, then filing chapter 7 bankruptcy is probably a wise move. With the protection allotted by the law, you can keep some of your possessions and earnings even after you file for bankruptcy. 

You Want To Avoid a Repayment Plan

If you file chapter 14 bankruptcy, you will be put on a repayment plan to pay off your debts. If your debts are over a particular threshold, a payment plan may be required when you file chapter 11 bankruptcy. Chapter 7 bankruptcy is one of the few options where you can avoid setting up a payment plan to repay your creditors. 

Mortgage and automobile loans are the only repayments you will have to make when choosing this bankruptcy option. However, this will only apply if you still have outstanding debt on either your home or your car. 

If you feel like chapter 7 bankruptcy is a good option for your current financial situation, then working with a lawyer to get your proverbial ducks in a row is important.