One powerful legal tool you can consider to erase what you owe is Chapter 7 bankruptcy. This is an ideal solution for those who are deep in debt and can't pay back what they owe, but require a fresh start.
A bankruptcy law service can offer assistance throughout the process, but you'll still need to understand some things before choosing liquidation. Here are questions you may ask to determine if you're making a smart decision.
How Will Bankruptcy Help?
If you have many debts and you know you are incapable of paying them, considering your properties and income, your only option may be filing for insolvency. You'll be expected to fill out documents to outline all your assets, earnings, and debts, then submit them to the court.
If you're still in employment, you will be expected to share recent pay receipts and returns. Your lawyer can help throughout this process to ensure you don't make mistakes because they understand everything about Chapter 7 bankruptcy law.
After submitting your forms, they will be reviewed carefully and your creditors will get an opportunity to talk more about the financial situation. After some months, the court will send a letter informing you if the debts are absorbed or not. The key to success is to be honest and follow the right steps.
Will Filing for Bankruptcy Ruin Your Image?
When you run away from those you owe for too long, you'll ruin your reputation and subject yourself to extreme pressure. Filing for liquidation may seem shameful, but it gives you a chance to start again. Of course, it will take some time to get any loan or acquire credit, but you'll have the opportunity. So, don't shy away from bankruptcy if you made some financial mistakes and need another chance.
What Debts Can This Bankruptcy Erase?
This kind of bankruptcy focuses on erasing all dischargeable debts. Common examples of these debts include medical costs, utility expenses, personal loans, vehicle loan deficiencies, credit card bills, and judgments from debt collection agencies. No one will be allowed to call you up and ask that you settle the debts once you file for liquidation until the court gives a verdict.
However, there are certain bills that can't be absorbed, like alimony, student loans, recent taxation bills, child support, and government debts like fines. Also, debts connected to an asset must be paid in case you'd like to retain the property. However, if you can't pay and wish to release the asset, your financial obligation will be erased through the liquidation petition.