In what Situation is Chapter 7 the best Bankruptcy choice ?

IN WHAT SITUATION IS

CHAPTER 7 THE BEST BANKRUPTCY CHOICE

NATHAN A BERNEMAN

CHAPTER 7 BANKRUPTCY IS CONSIDERED THE BEST LAST-DITCH CHOICE FOR CONSUMERS WHO ARE EXPERIENCING FINANCIAL DIFFICULTIES. A BANKRUPTCY OFFERS A FRESH START, AND THE POSSIBILITY OF LIQUIDATING DEBT.

THERE ARE UNIQUE SITUATIONS WHERE CHAPTER 7 BANKRUPTCY MIGHT BE THE BEST CHOICE IN YOUR SITUATION. DEBTORS MAY FILE BANKRUPTCY WHEN THEY ARE OVEREXTENDED ON CREDIT, WHEN THEY HAVE OVERWHELMING AND UNEXPECTED EXPENSES, AND/OR WHEN THEY’VE SUFFERED A REDUCTION OF INCOME.

CHAPTER 7 BANKRUPTCY MAY BE A GOOD CHOICE BECAUSE IT ALLOWS YOU ACCOMPLISH THE FOLLOWING:

1. TO REBUILD CREDIT SCORE

CHAPTER 7 BANKRUPTCY OFFERS THE POSSIBILITY OF GETTING OUT FROM UNDER THE DEBT, SO YOU CAN START TO REBUILD YOUR CREDIT. WHILE YOUR SITUATION WILL VARY, BASED ON YOUR PERSONAL HISTORY, YOU CAN CREATE A BUDGET, PAY YOUR BILLS, AND KEEP UP WITH YOUR STUDENT LOAN AND/OR OTHER PAYMENTS. YOU CAN ALSO SIGN UP FOR A SECURED CARD, GET A CO-SIGNER, AND LOOK FOR A LOAN THAT WILL HELP REBUILD YOUR CREDIT.

2. RELIEF FROM CREDITOR HARASSMENT

CHAPTER 7 BANKRUPTCY GETS RID OF THE HARASSMENT FROM CREDITORS, INCLUDING GARNISHMENT, COLLECTION CALLS AND SOLICITATIONS, AND OTHER COLLECTION TACTICS. THAT LEVEL OF HARASSMENT IS ENOUGH TO MAKE SOME DEBTORS JUMP AT THE CHANGE TO GET RID OF THE EMBARRASSMENT.

3. HUGE MEDICAL AND CREDIT CARD DEBT

CHAPTER 7 BANKRUPTCY CAN “FIX” THOSE SITUATIONS THAT APPEAR TO BE INSURMOUNTABLE. HUGE DEBTS FROM MEDICAL EXPENSES ARE PARTICULARLY TROUBLESOME, PARTICULARLY SINCE YOU MAY ALSO HAVE A HEALTH SITUATION TO CONTEND WITH AS WELL. CREDIT CARD DEBTS CAN ALSO QUICKLY ADD UP IN TIMES OF EMERGENCIES OR UNEXPECTED SITUATIONS BEYOND YOUR CONTROL.

4. RISK OF GOING THROUGH FORECLOSURE

CHAPTER 7 BANKRUPTCY CAN “SAVE” YOU FROM FORECLOSURE, WHICH COULD MEAN LOSS OF YOUR PROPERTY. A CHAPTER 7 BANKRUPTCY CAN GIVE YOU A REPRIEVE FOR A LITTLE BIT, WHICH GIVE YOU MORE TIME TO EITHER NEGOTIATE A SOLUTION OR PROTECTION FROM LOSS. ONCE YOU FILE FOR BANKRUPTCY, THE COURT PLACES AN AUTOMATIC STAY INTO EFFECT, WHICH PROHIBITS FURTHER ACTION.

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