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Bankruptcy may be right for some people

On Behalf of | Oct 17, 2019 | Chapter 7 Bankruptcy |

For some Virginia residents, filing for bankruptcy can be a drastic step. For others, though, it can be a tool that will help them get back on their feet and start over with a clean slate. In addition to finding out if a person actually qualifies for bankruptcy, there are other things to consider when deciding if this is the right choice.

One of the first steps a person would want to take is determining how much money they have, in cash and assets, and determining if their income will be stable. This will play a huge role in deciding if it is realistic to pay off debt as opposed to going the bankruptcy route. For example, it may be that a person has $25,000 in credit card debt and they have a car loan. This may be unrealistic for a person to pay if they make less than $40,000 a year. However, it could be doable if a person makes $75,000 a year.

Before some people turn to bankruptcy, they may consider debt settlement. While this has offered some people benefits, it is important for a person to exercise caution before going this route. One thing to know is that a person will usually get a better outcome if they have legal representation. Credit card companies and debt collectors are not looking out for the debtor’s best interests. If the debtor has a lawyer, the lender or debt collector may offer them a better settlement to avoid the costs that come with litigation.

Chapter 7 bankruptcy offers a variety of benefits, including allowing a person to save money, get a fresh start, and avoid paying taxes on money that has been discharged. However, not everyone qualifies for it. An individual may wish to speak with an attorney in order to find out about the qualifications for bankruptcy. The attorney might be able to provide other legal advice that could have a beneficial impact on a person’s finances.