When unexpected financial strife affects your ability to pay debts, you may find yourself quickly overwhelmed and unable to catch up. The loss of a job, an illness or other issues may cause this circumstance, but Chapter 7 bankruptcy could help. Forbes reports that individuals, married couples and business owners can all take advantage of this kind of bankruptcy, which may help them recover.
Before you decide whether to declare Chapter 7 bankruptcy, there are several possible benefits to the process you may want to know about.
Chapter 7 bankruptcy gives you the option to file under several different circumstances and perhaps offer financial protection to a spouse or business partner. For example, if you are married and decide to file, the law does not require your spouse to undergo bankruptcy with you, even if you file taxes jointly. If you are part owner of a business that no longer sees a profit, you may have the option to file for both business and personal bankruptcy.
Protection of assets
During the Chapter 7 bankruptcy process, a court-appointed trustee reviews your assets and income before deciding how to use the proceeds to pay back your creditors. This portion of the bankruptcy is liquidation; however, some of your assets may fall into an exemption category, allowing you to protect at least some of your property under certain circumstances. Your trustee can advise you about which assets may qualify for an exemption.
Chapter 7 bankruptcy allows you to discharge your debts fairly quickly when compared to other types. This can help you start fresh and rebuild your finances instead of continuing to struggle with payment plans and creditor harassment.