Taking Control of Debt Through Chapter 7 Bankruptcy
Bankruptcy is a process by which consumers can eliminate or repay some or all of their debts under the protection of the federal bankruptcy court. Where a consumer is drowning in credit card debt, Chapter 7 bankruptcy is an option they may want to consider.
Chapter 7 bankruptcy is provided for by US Federal Bankruptcy law in order to give the consumer a fresh financial start. This particular form of bankruptcy addresses most unsecured debt such as credit cards, medical bills, personal loans, and outstanding debts on repossessed vehicles. In most cases, where a consumer qualifies for a chapter 7 bankruptcy, these unsecured debts can be discharged, eliminating the consumer’s obligation to pay.
Many people are concerned that if they file bankruptcy they will never be given credit again. Because of this fear they continue to struggle to pay debts they cannot afford. This often results in poor credit ratings anyway. Filing bankruptcy can free an individual from the burden of making unmanageable credit card payments and those funds can then be used for other expenses. Additionally, there are many ways to rebuild credit after bankruptcy is filed. Credit can be rebuilt slowly through obtaining secured credit cards from a bank and eventually using unsecured cards again with low credit limits. Filing bankruptcy in no way destroys one’s credit forever.