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4 signs that Chapter 7 bankruptcy could be your best choice

On Behalf of | Dec 19, 2022 | Bankruptcy

You know that your debts are more than you can afford and the problem overwhelms every aspect of your life. What you might know is what to do about it.

Is Chapter 7 right for me?

There are several options out there for people in Jackson who are dealing with debt, including filing for bankruptcy. But which type of bankruptcy should you choose? Chapter 7 bankruptcy is the most commonly used type for personal bankruptcy protection, but is it right for your family? Here are four signs that Chapter 7 bankruptcy might just be your best choice for getting out of massive debt.

  • You don’t own extensive assets.
  • Your total debt adds up to more than 50 percent of your annual income.
  • The debts are things that you can discharge under Chapter 7 bankruptcy, such as credit card debt, payday loans and medical bills.
  • Even if you put everything possible into paying off your debts, it would take at least five years to accomplish.

If two or more of these apply to your situation, Chapter 7 bankruptcy, also known as discharge bankruptcy, might be the fastest, least expensive and most effective way of getting your debts under control. Keep in mind that this form of bankruptcy cannot discharge all types of debt, however. Things like unpaid taxes, student loans and back child support generally are excluded from the Chapter 7 process. On the other hand, with your medical or credit card debt discharged, you would have more money freed up to pay off those other debts.

Everybody’s debt problems are different. To find out for sure if Chapter 7 bankruptcy or another strategy is your best choice, schedule an appointment with a bankruptcy attorney.