The Truth about Chapter 7 Bankruptcy

Bankruptcy for a lot of people is a dirty word. A bankrupt is someone who is lazy, opportunistic, and financially irresponsible. A bankrupt is someone who wants to avoid paying the piper.

The reality is bankruptcy law is a piece of protective legislation. According to the website of Bradford Law Offices, PLLC, it is designed to be the last resort for people who have lost the capacity to pay their debts because of illness of the individual or family member, serious injury, loss of employment, or other overwhelming circumstances not under their control that can hit even the most diligent, honorable, and financially responsible person. This is a scenario that is unfortunately all too familiar to a lot of people, especially in the last decade.

Filing for Chapter 7 bankruptcy in particular is a decision that is not to be taken on a whim. It will help an individual burdened by unpayable debt despite good faith efforts to discharge them and give them a fresh start, but it will also require liquidating all assets (with some exemptions, depending on the state) accumulated so far. That can be devastating for most people. And it is not easy to qualify for it either.

To discourage deadbeats from exploiting the law, Chapter 7 bankruptcy typically requires that the applicant pass a means test, which will determine if there are grounds to grant legal protection to an individual from creditors. A successful applicant will take a hit on their credit score and also be barred from filing again within 7 years, so if the financial situation is not so dire, Chapter 7 may not be the right solution to your problems.

It is not easy to make the right decision when it comes to bankruptcy. It would be advisable to consult with a bankruptcy lawyer in your state to help you decide if filing for Chapter 7 bankruptcy is your best option at this point.

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