Thinking of filing Chapter 7 bankruptcy?
It is very important to ask yourself a number of questions first so that you can know exactly how to proceed.
1. Can Chapter 7 address all of your debts?
If you just have one type of debt — like overwhelming credit card debt — this may be a fairly straightforward process. However, you should know that Chapter 7 cannot typically be used for things like alimony, child support or tax debts that you never paid. That does not mean you can’t use bankruptcy, just that some debts may last through it.
2. Do you want a repayment plan?
If what you’re looking for is a repayment plan that you can use to pay off your debt, you do not want Chapter 7. You want Chapter 13. It gives you a plan that lasts for three to five years. With Chapter 7, you eliminate all eligible debt as soon as the filing is complete, with no repayment plan.
3. Do you have co-signers?
If someone else co-signed a loan with you, that person may still need to pay back the debt, even after bankruptcy on your part. This is typically more common with Chapter 7 than Chapter 13. Make sure that you know what to do to really eliminate the debt, rather than just sticking someone else with the full amount.
As you can see, it is crucial to really consider bankruptcy from all angles before filing. This way, you will know exactly what type of bankruptcy is right for you and what benefits you can expect to see.