When you are thinking about filing for Chapter 7 bankruptcy, you have several options, but before you commit, you should make sure that this form of bankruptcy is right for you. There are a few questions you should answer that can help determine the correct choice:
- Will creditors be able to claim your property if you do not file for Chapter 7 bankruptcy? In some circumstances, creditors will not have anything significant to take from you to satisfy your debt to them. For example, if your income comes from Social Security, which is a protected asset, and your property is exempt, creditors might realize that suing for judgment is pointless. In that case, filing for Chapter 7 bankruptcy is probably unnecessary.
- Do you have enough dischargeable debt to make bankruptcy worthwhile? If your debts mostly consist of things like child support, alimony, student loans in many cases, recent income taxes or recent luxury debts, then Chapter 7 bankruptcy might not be right for you.
- Will you have to give up anything you really want to keep? There are some things that typically cannot be saved from creditors during bankruptcy, such as expensive musical instruments (unless you work as a musician), collections of stamps or coins, family heirlooms, cash, stocks, bank accounts, your second vehicle or your second home. If any of these are too important to you to lose, bankruptcy might not be the best option.
If you have read the above and found that Chapter 7 bankruptcy does not fit your needs, then consider some of our alternatives to Chapter 7 bankruptcy.
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