Some people in Ohio have overwhelming debt that could be discharged in a Chapter 7 bankruptcy filing. Although bankruptcy stays on a credit report for 10 years, it can actually strengthen some people’s credit scores. Here are three indications that Chapter 7 bankruptcy may be the right move for your financial situation.
No. 1: Your biggest debts are dischargeable in bankruptcy
Chapter 7 bankruptcy can wipe out consumer debts like credit card balances, payday loans and medical bills. However, if you have debt from unpaid child support, back taxes or student loans, Chapter 7 probably won’t help you. It’s important to analyze how much and what kind of debt you have before deciding whether Chapter 7 is right for you.
No. 2: You don’t have a lot of assets
During the Chapter 7 bankruptcy process, you may be required to liquidate valuable assets to pay off creditors. However, most people who file for Chapter 7 don’t have a lot of expensive possessions because they have already been struggling financially for some time. Your home, your car, most personal items and business assets are likely exempt.
No. 3: Paying off all of your debt would take five or more years
You may have already tried throwing money at your debts, cutting back on expenses and working overtime. If you would still have debt after living frugally for five years, bankruptcy may be the best option for you. You have to remember that even if you’re extremely careful with money, unexpected expenses could pop up and throw your strict budget right off track.
Bankruptcy is not a do-it-yourself task
A successful bankruptcy discharge is more difficult to get when you try to do everything yourself. A lawyer may work with you to ensure that your personal possessions are exempted and your eligible debts are discharged.