Millions of Americans each year find themselves stuck in circumstances that they have no control over like the loss of a job, serious illness with large medical bills, divorce, or some other unexpected event where large expenses are incurred.
Maybe the individual just overextended their credit by living beyond their means which has led them into serious financial difficulties.
Whatever the cause, filing Chapter 7 Bankruptcy can provide relief to many individuals in difficult financial circumstances.
Chapter 7 Bankruptcy is particularly helpful to individuals buried in unsecured debt.
Unsecured debts are debts that are not secured by property or a particular asset such as credit card debt, medical bills, old utility bills, and personal loans.
Chapter 7 bankruptcy, or straight bankruptcy, is what is known as a liquidation proceeding.
This refers to the fact that the trustee can take any assets or property not protected in the bankruptcy filing and liquidate it, or sell it, so that the proceeds may be distributed to the creditors.
The thing to keep in mind is that bankruptcy was not created as punishment for individuals who are struggling financially.
Bankruptcy was created to give honest hard working people a way to eliminate overwhelming debt and gain a fresh start.
That is why exemptions were added into the bankruptcy code which are federal and state laws that allow debtors to keep a certain amount of personal property in a bankruptcy filing.
Most states offer fairly generous exemption laws and with the guidance of an experienced bankruptcy attorney, most individuals rarely lose any property or nothing at all.
Plus once the bankruptcy petition is filed with the court, the automatic stay goes into effect which will immediately stop creditors and debt collectors in their tracks.
This means no more harassment from angry creditors.
The automatic stay will also put a stop to law suits, wage garnishments, judgments, and foreclosure proceedings.
This will allow the debtor some breathing room so that they can regroup and work on a plan to get their life and finances in order.
A Chapter 7 Bankruptcy typically takes about three to six months from beginning to end and then the debtor can enjoy being debt free or close to it.
To fully take advantage of the fresh start that Chapter 7 Bankruptcy offers, an individual must be honest with themselves and not bury their head in the sand when it comes to the seriousness of their financial situation.
Kicking the can down the road hoping that things will change is not the best solution for severe financial problems.
The longer the individual waits to take action and address the problem can be detrimental to them in the end.
These days creditors have gotten very aggressive in their collection tactics resorting to legal action right away.
Why wait until your wages are garnished or you are facing a lawsuit? Speak with a bankruptcy attorney early on and you can avoid many headaches and sleepless nights, not to mention averting the possibility of losing extra money or property to creditors from legal action.
The sooner someone takes action the sooner they can benefit from a fresh financial start.