With prices rising on nearly all goods and service providers trying to nickel and dime you every chance they get, it’s easy to build up credit card debt in today’s world. Those who experience sudden job loss or the onset of an unexpected medical condition can be especially susceptible to overwhelming debt. When that debt is carried on a credit card, you can quicky find yourself in a spiral of making payments that have little impact on the principal amount of debt. This is attributable to the high interest rates involved and can leave you feeling overwhelmed and frightened for what the future may have in store for you.
Fortunately, you might be able to alleviate this burden and secure the fresh financial start you deserve by pursuing Chapter 7 personal bankruptcy. But how does that process work? Let’s take a closer look.
The personal bankruptcy process can seem daunting, but you shouldn’t let it frighten you. After all, the process can help rid you of burdensome debt and give you the fresh start you want. Here are some important aspects of the process that you need to know:
- Chapter 7 requires liquidation: Chapter 7 bankruptcy is known as a liquidation bankruptcy, meaning you may have to sell off a significant portion of your assets to pay off creditors as fully as possible. Only once this process is complete will any outstanding debts potentially be discharged.
- Exemptions are available: Even though the thought of selling your assets might leave you on edge, you should take comfort in the fact that there are several bankruptcy exemptions that you can utilize to ensure post-bankruptcy stability. This includes keeping a certain amount of equity in your home and vehicle, as well as some of your furnishing, home goods and clothing. The list is extensive and generous, so make sure you understand what you can exclude from the bankruptcy process before moving forward.
- You can rebuild your credit: Although a personal bankruptcy will cause your credit score to dip, you can rebuild it over time. You can do this by opening a line of credit that’s secured by collateral, having co-signers on loans and making all debt payments on time and in full moving forward. It’s also helpful to maintain your job and address to show that you can maintain stability.
- Filing for bankruptcy doesn’t mean you’re a failure: A lot of people make the mistake of thinking that filing for bankruptcy is indicative of financial failure. It’s certainly not. It’s hard to get ahead in today’s world, and for many it often only takes one unforeseen and undeserved circumstance to throw them into financial despair. So, don’t be hesitant to navigate the process simply because you’re afraid of what it’ll do to your reputation or your feelings of self-worth. You’re value is so high that you deserve a second chance at life.
Are you ready to rid yourself of credit card debt?
If so, then now is the time to start figuring out your next steps to secure debt relief. Personal bankruptcy should be amongst your options. So, be sure to think through what the process can do for you and what you can do to maximize your chances of achieving the outcome that you want. An attorney who is well-versed in this area of the law may be helpful if you have any lingering questions about how to proceed with your bankruptcy case.