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Explaining Chapter 7 bankruptcy

There is a great deal of stigma and misinformation that surrounds the practice of filing for bankruptcy. However, for some Kentucky residents facing insurmountable debt, Chapter 7 bankruptcy in particular can be extremely useful in handling this debt problem. It is important for residents to have a full understanding of what Chapter 7 entails before seeking out the necessary legal support to begin this process, however. 

Chapter 7 bankruptcy is easily the most common form of bankruptcy used by individuals and businesses in America. In essence, the debtor asks the bankruptcy court to discharge some or all outstanding unsecured debts -- this includes credit card debt, but may not include other types of debt such as student loans. In some cases, assets may be liquidated in order to free up capital to help pay down creditors, but quite often, those who file for Chapter 7 do not lose assets. This is because many assets are exempted from qualification for liquidation under bankruptcy law. 

Debts that are chosen for discharging take sixty days to discharge fully, at which point, the debtor is not longer required to pay towards that debt. The low debt-to-income ratio that comes after a Chapter 7 filing often places debtors in an excellent position to begin rebuilding their credit. Of course, this is not the ideal solution for everyone, which is why those facing debt problems should understand all their options before choosing a course of action. 

Chapter 7 bankruptcy can help ease the financial burden on an individual or family here in Kentucky, which can pay tremendous dividends in terms of financial and even personal health. The stress of debt cannot be overstated, which is why discharging debts through Chapter 7 bankruptcy can be such an attractive prospect. With the help of a dedicated bankruptcy attorney, individuals facing looming debt can work to improve their financial position for 2018 and beyond. 

Source: Chicago Tribune, "Help Squad: Is bankruptcy right for you? And what kind?", Cathy Cunningham, Jan. 3, 2018

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Law Office of Ginger C. Cord, PSC
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