There are many reasons why a family in New York might be facing financial stress.
Credit card and student loan debts, dwindling savings accounts and even medical bills from emergency or unexpected health scares are just a few examples of the financial problems that many people face on a day-to-day basis in America.
As your debt burden increases and your income or savings decrease, could Chapter 7 bankruptcy help you and your family address financial concerns?
Chapter 7 bankruptcy basics
For some of our readers, the answer to this question is a resounding “yes.” The primary purpose of Chapter 7 bankruptcy, commonly referred to as “liquidation” bankruptcy, is for consumers to:
- address their debt by selling certain assets;
- apply the proceeds from the sale of assets to outstanding debt obligations; and
- discharge most remaining, unpaid debts.
At the end of a Chapter 7 bankruptcy filing, the filer should pretty much have a “clean slate” when it comes to debt obligations.
Of course, there are many details in the process that can impact how Chapter 7 bankruptcy actually works in any given situation.
For example, there are income thresholds involved in these types of cases. And, not all assets are part of bankruptcy cases – filers typically get to keep assets that they use for their jobs, for example. And then, there are some types of debt that usually cannot be discharged in a bankruptcy filing, such as student loan debt.
However, with some or all debt discharged, individuals and families in New York will likely be in a better position to rebuild their financial status. Chapter 7 bankruptcy can be a useful option for those who find themselves looking for potential solutions in a bad financial situation.