Personal bankruptcy can be a stressful and complex legal process. When a Maryland resident determines that bankruptcy may be a good option for them to remedy their overwhelming debts, they can choose to contact a knowledgeable personal bankruptcy attorney to support and advise them. This post does not provide any legal advice and specific questions about the Chapter 7 bankruptcy process should be directed to local bankruptcy attorneys.
Fact #1: Chapter 7 bankruptcy is not for everyone
Chapter 7 bankruptcy is one of two common forms of personal bankruptcy. It involves the evaluation of a debtor’s wealth and the sale or liquidation of their assets to repay their creditors. As such, if a debtor has income that can be dedicated to the repayment of their loans and financial obligations, they may not be permitted to use Chapter 7 bankruptcy to overcome their financial challenges. Other restrictions may limit who may use Chapter 7 bankruptcy to seek financial stability and debtors should investigate if they qualify before the begin the filing process.
Fact #2: Liquidation does not mean everything is sold
The liquidation process of Chapter 7 bankruptcy can be overwhelming for many debtors, but it is not comprehensive. That is to say, debtors are allowed to keep some of their property despite the mandate to sell what they have to pay off their debts. Certain exemptions exist that allow them to keep clothing, home goods, and even vehicles so that they can continue to live their lives despite their involvement in the bankruptcy process.
Fact #3: Bankruptcy can have long-term financial impacts
Although bankruptcy is a useful legal tool for many, it is not without drawbacks. A bankruptcy discharge can affect a person’s ability to get credit and to apply for loans. It lower their credit score and can prevent them from buying homes, cars, and other items of property. Before a person files for Chapter 7 bankruptcy, they may wish to investigate other options for lowering their debt with their trusted bankruptcy and debt relief attorneys.
