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Can Chapter 7 bankruptcy be used in debt relief?

Debt is not something that people want to have to deal with. In a perfect world, everyone would be debt-free because everyone would have the ability to pay for their big ticket purchases outright. Of course, we do not live in a perfect world and, unfortunately, debt is a very real part of life for many people. Simply put, debt is when you owe money. Many people experience debt when buying a house or car or paying for tuition. Because these types of purchases require a substantial amount of money, people may take out loans to complete them.

Even when people are in debt, it is not the end of the world. There are ways to crawl out from under debt and, depending upon the situation you are faced with, debt resolution strategies are often appropriate. One such resolution is to file for bankruptcy. When a debtor files for Chapter 7 bankruptcy, they must liquidate their assets in order to pay off their debt. Some debts and liens are exempt from bankruptcy.

Because this is a legal proceeding, bankruptcy needs to be filed in court. This means that the court will oversee the process to ensure that all of the statutory rules and regulations are adhered to. Bankruptcy is a fairly common process and is utilized by many people for various reasons. Some people just want to get a fresh start and see bankruptcy as a way to do this. Chapter 7 bankruptcy can be a viable option to relieve one of debt.

Source: FindLaw, "Chapter 7 Bankruptcy Rules Overview," Accessed December 16, 2014

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