Individuals caught in overwhelming debts are usually stressed enough to still be able to figure out what can save them or what they can do to save themselves. To many, the thought of having to sell everything they have painstakingly worked for is just too painful a thought – but what else is there left to do?
People, who may even be “facing the possible loss of their home” due to the mounting bills and debt that they are no longer able to pay, actually have various legal options which will help them regain control of their financial situation – one of these is through bankruptcy.
Obviously, people who still get caught in the kind of predicament mentioned above have not heard of the bankruptcy law yet. Bankruptcy is one legal solution that individuals or businesses, with overwhelming debts, can use to help them control their finances again. This law will also actually allow them to declare their inability to keep paying individual or business debts that have become unmanageable. But other than this, having a bankruptcy application recognized by the court will mean immediate cessation of whatever form of harassment (in the form of e-mails, phone calls, letters, text messages, lawsuits and others) law firms and debt collectors use to force debtors to make payments.
There are different options in the bankruptcy law, each intended to address a person’s or business’ particular needs. To be able to assess your situation well and so make the right decision, it is best that you are assisted by a well-versed bankruptcy law attorney. If you own a firm, then your attorney may tell you that filing for Chapter 7 bankruptcy may be the best legal option for you in settling your debts.
Specifically, Chapter 7 bankruptcy is a liquidation bankruptcy method that is best for people who have properties, but whose salary or income does not go above the stipulated limit in the chapter. As the definition suggests, this law will require the liquidation of a few of your properties (you can choose specific properties, though, that should not be sold). The selling is to be done by a court-appointed trustee who will also distribute the amount earned to your creditors. Debts to be paid are only those categorized as non-dischargeable, such as court fines, alimony and student loans. Medical bills, business and personal loans, debts due to use of credit cards are called dischargeable debts, meaning, the court may free you from the obligation of still paying these.
One requirement this law has is the means test, which applicants need to pass. The means test is a way to determine if your income is low enough to qualify you to seek protection under this specific law.