You may be in a huge financial bind for a number of reasons--a job loss, huge medical bills, or even just spending beyond your means. If you have reached a point where the debt you owe is far beyond what you are able to pay back, and you can't afford to make monthly minimum payments on that debt, filing for chapter 7 bankruptcy may be a solution. There are many benefits to filing for chapter 7 bankruptcy when the debts you owe are overwhelming, such as:
Most Debts are Wiped Clean
When you go through chapter 7 bankruptcy, there is a good chance that the majority of your unsecured debt will be discharged and you will be relieved of the burden of paying it back. This includes credit card debt, medical bills, any accounts that are in collection, past due utility charges, and any money owed on lease agreements. It may take you a while to build up your credit score after filing for bankruptcy, but if you have been living with huge amounts of debt there is a good chance that your credit is already suffering. When your debts are discharged, you will no longer have to live with the stress of trying to figure out how to make the minimum payments on different accounts.
No More Harassment from Creditors
When you fall behind on payments, creditors and collection agencies can be ruthless in trying to get you to pay up. During your financial crisis, you probably get multiple calls a day from creditors, and some creditors may go as far as contacting your place of employment, which can be disruptive and embarrassing. As soon as you file for chapter 7 bankruptcy, an automatic stay will be put into place, which makes it against the law for creditors to continue to contact you.
You Can Most Likely Keep Your Home and Vehicle
When you file for chapter 7 bankruptcy, items that are high in value may be seized in order to be sold and the profits are used to pay off some of your debts. But the courts don't want a person who files for bankruptcy to be left with nothing, which is why there are property exemptions. If you do not have a large amount of equity in your home (equity exemption amounts vary from state to state), you will be able to keep it a long as you continue to pay your mortgage.If your car is worth less than the exemption amount for vehicles in your state you will be able to keep it too; in the event that your vehicle is worth more than the exemption amount and is seized and sold, you will be paid the exemption amount which you can use to purchase a new vehicle.
For professional legal help, contact a lawyer such as Richard S. Ross - Bankruptcy Attorney.