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Bankruptcy: An option for relieving your debt

If your credit card debt has grown out of control, it's time to start the new year fresh. There are several ways to handle your debt, but it's smart to consider bankruptcy.

If your income is low enough or you have debts that are unsecured, you may want to consider bankruptcy and the fresh start it could give you. A chapter 7 bankruptcy is a good option, because it allows you to eliminate your debts without having to set up a payment plan.

Don't you lose everything in a chapter 7 bankruptcy?

No, you don't. There are many different exemptions that allow you to keep items that you need. Bankruptcy is not meant to make you start completely from scratch, because that would potentially put you directly back into debt. Instead, bankruptcy aims to pay back as much as possible by liquidating unnecessary assets.

Here's an example. If you have two vehicles but only need one to get to and from work, you may be able to exempt one vehicle from bankruptcy but need to sell the other for the purposes of the bankruptcy. Your home may be protected, at least in part, but any additional properties you own may not be.

Are there better alternatives than bankruptcy?

It just depends on your situation. If you have enough income coming in, you may want to try alternatives such as:

  • Debt consolidation
  • Repayment plans with individual creditors
  • Negotiating to settle with your creditors directly

Your attorney will help you learn more about alternatives to bankruptcy if you are interested in trying other alternatives before bankruptcy.

What happens if you don't qualify for Chapter 7 bankruptcy?

If you don't qualify for Chapter 7 bankruptcy, there are other kinds that you may be able to use to get yourself out of debt. For example, there is Chapter 13 bankruptcy, which is beneficial because it allows you to pay back what you owe in the next three to five years. With that arrangement, it's easier to get out of debt and reduce the impact of that debt on your life.

After the three to five years of making payments on time, the remaining debts included in the bankruptcy will be dismissed. That then frees your finances to move forward with no further debts (other than those that were not included in the bankruptcy filing). Your attorney can help you learn more about alternative forms of bankruptcy if you're interested.

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Whether you have a family law issue, an estate planning question or are considering bankruptcy, I can help you find a sustainable solution that provides relief and hope. Schedule your consultation at my Nashua, New Hampshire office today by calling 603-635-4149 or by sending us an email.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

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