Overwhelming debt can be a significant and stressful struggle for individuals facing it. Fortunately, the legal process provides different options and remedies for those struggling with debt and seeking debt relief. In addition, there are bankruptcy options available for individuals in different circumstances. Individuals seeking debt relief may wonder what those options are and how they can help.
There are generally two types of personal bankruptcy available to individuals seeking debt relief. Chapter 7 liquidation bankruptcy and Chapter 13 reorganization bankruptcy are both types of personal bankruptcy available to individuals seeking debt relief. Chapter 7 bankruptcy allows the party filing for bankruptcy to liquidate non-exempt assets to repay debts. Chapter 13 bankruptcy allows the filing party to reorganize debts and development a repayment plan to enjoy debt relief.
Individuals must have a reliable source of income to file for Chapter 13 bankruptcy. Individuals wishing to file for Chapter 7 bankruptcy must not earn more than the median income for the state where they reside. Debts are treated differently depending on the type of personal bankruptcy the party files for so it is important to understand which type of bankruptcy is best for you, which type you qualify for and how the process can provide debt relief.
There are a number of different options available for individuals struggling with overwhelming debt to consider but it is important for them to be familiar with those options. A solid understanding of the options and resources available to them can help individuals considering filing for personal bankruptcy arrive at the best decision for their unique circumstances and goals.