Chapter 7 bankruptcy is a viable option for individuals who have an insurmountable amount of certain types of consumer debt. This legal process allows an applicant to discharge specific types of debt and emerge to a better and more stable financial future. If you are considering this step, it can be helpful to understand how this process works and what you can expect after it is final.
Many people hesitate to file for Chapter 7 bankruptcy because they are unsure of how it really works. There is a lot of misunderstanding and stigma surrounding bankruptcy, but in reality, it could be a beneficial and positive step for you. It is possible to rebuild your credit and enjoy a future free from harassing phone calls from creditors and debt collectors.
What debts will Chapter 7 address?
While you will be able to discharge many types of debt through the bankruptcy process, there are certain types of debt that are not eligible for discharge. After completing Chapter 7 bankruptcy, you may still be responsible for the following types of debt:
- Tax debt
- Student loans
- Unpaid spousal support
- Unpaid child support
- Debts that arise from personal injury claims
There are limits to the types of debt that you will be able to discharge through Chapter 7 bankruptcy. In very limited cases, it may be possible to discharge tax debt or student loan debt. Before you file for bankruptcy protection, you would be wise to learn exactly what types of debt you will be able to address.
It is prudent to set yourself up for a successful post-bankruptcy future with realistic expectations and a clear view of what you can accomplish by taking this step. You may also find it helpful to note that filing for bankruptcy does not preclude a person from meeting his or her child support obligations.
Your post-bankruptcy credit
One of the most common concerns people have regarding bankruptcy is the impact it can have a credit score. With time, it is possible to rebuild credit and correct inaccurate information on your credit report. This will make it easier for you to secure loans and mortgages in the future.
Bankruptcy is a serious financial and legal decision, and it is smart to carefully weigh all options before moving forward. If you have concerns about how this step will affect your future, you may want to discuss your case with an experienced Tennessee bankruptcy attorney.