If you are constantly struggling to keep up with monetary obligations, like so many others, you could be experiencing the burdens of debt. Overwhelming amounts of debt can have a substantial impact on your everyday life, and the financial uncertainty of similar concerns could leave you feeling stressed out and emotionally drained.
Fortunately, there are outlets of relief available that could help you regain control of your finances. However, with little to no experience in such matters, you might be uncertain if a Chapter 7 bankruptcy is the correct path to take.
Gaining an understanding of Chapter 7 bankruptcy
No matter how you look at it, filing for bankruptcy is a major financial decision that often requires a great deal of thought and planning. Gaining a better understanding of the process of filing for bankruptcy under Chapter 7 could help you decide if it is a viable option, and some factors to consider may include the following:
- Financial circumstances: The correct path with which to pursue relief may depend on your financial situation. If you are constantly unable to keep up with monthly payments and your debts take up a significant portion of your income, Chapter 7 could be the most viable option.
- Eligibility to file: Before you can proceed with Chapter 7 bankruptcy, you must pass the means test, which uses factors such as your income and expenses to determine if you are eligible to file.
- Liquidation of assets: This type of bankruptcy also calls for the liquidation of certain non-exempt assets. However, this doesn't necessarily mean you will lose all your assets, as you could retain ownership of many or most of your possessions throughout the process.
- Discharge of debts: In Chapter 7, most or all of your unsecured debts may be eligible for discharge. While others might not be eligible, the immediate financial relief could free up enough income to allow you to meet other financial obligations with less difficulty.
Another concern you may have could pertain to the impact a bankruptcy will have on your credit score. However, if you are constantly behind on payments, you may already be struggling in this area, and you could begin rebuilding your credit shortly after your bankruptcy is finalized.
With the potential weight of your decisions, and your financial future on the line, pursing relief from debts can be an exceedingly intimidating process. Fortunately, you may be able to overcome all your concerns by seeking guidance from someone who is knowledgeable in federal and New Jersey state bankruptcy laws. By obtaining advice on the options available to you and their potential outcomes, you could be in a better position to make informed decisions and choose the correct path with which to pursue a brighter financial future.