If you have to file bankruptcy and want to know what your best alternative is in terms of what type of bankruptcy you have to file then you will want to inquire about Chapter 7. Under the Bankruptcy Abuse Prevention and Consumer Protection Act passed in 2005, it is much more difficult to qualify for Chapter 7 bankruptcy as the federal government is attempting to funnel the bulk of bankruptcy cases into Chapter 13 which requires repayment.
The Advantages of Chapter 7 Bankruptcy
The recently passed laws aim at making bankruptcy as less attractive of an action as possible and limiting Chapter 7 cases plays a big part. If you are eligible for and file Chapter 7 bankruptcy then you are technically not required to pay off some of our outstanding debts. Your nonexempt possessions (if you have any) are liquidized and the possessions are given as payment to your lenders. Any unpaid debts, with a few notable exclusions, are discharged and you are permitted to retain your exempt assets and start over.
Some of the notable exclusions to dischargeable debts after your Chapter 7 bankruptcy are:
--Student loans
--Alimony/child support
--Taxes
--Proceeds from a fraudulent or illegal activity
There are a few more non-dischargeable debts and the number and extent vary from state to state but the evidence is in the pudding: if you're eligible for Chapter 7 bankruptcy then it's probably your best alternative.
Learn More About Chapter 7 Bankruptcy
You'll want to speak to a bankruptcy lawyer about whether or not you may file Chapter 7. They'll tell you about the "means test" and whether or not you qualify for protection under Chapter 7. That way you could get an idea of where you are at and where you're going so you can get to a debt free destination as quick as possible.
