If you incurred extensive debt due to a serious injury, illness, or personal financial situation, filing Chapter 7 bankruptcy may provide you with financial relief. While filing Chapter 7 bankruptcy is associated with many benefits, especially if you are dealing with large amounts of debt, there are several things that the process can do and several things that it cannot do for your personal situation.
What it Can Do
When you file for this type of consumer bankruptcy, the process will:
- Eliminate credit card debts and other forms of unsecured debt, like a car loan
- Get rid of certain kinds of liens
- Stop debt collection activities and creditor harassment
In comparison with Chapter 13 bankruptcy, during the Chapter 7 bankruptcy process, some of your assets will be liquidated to provide repayment to your creditors.
What the Process Can’t Do
When you file for this type of consumer bankruptcy, it is important to keep in mind that this process does not eliminate all debts. For example, this process cannot discharge alimony and child support payments and usually does not get rid of student loan debts, except in very limited circumstances.
Additionally, this process cannot deter a secured creditor from repossessing property. This is because bankruptcy eliminates the need to repay your creditor, but does not relinquish their rights to the property.
How an Attorney Can Help
If you aren’t sure whether filing Chapter 7 bankruptcy is the right choice for your personal situation, at Northpointe Law Group, we can help. We will analyze your situation, provide you with alternative options, and guide you throughout the process if you do decide to file.