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Could Chapter 7 bankruptcy help during these difficult times?

On Behalf of | Jan 4, 2021 | Bankruptcy

For many people in Arkansas and across the country, facing financial issues is a threat now more than ever. Even if individuals have done their best to always remain conscientious about their spending and handling of their bills, job loss, medical emergencies, changes in circumstances and other issues could lead to serious debt issues coming on quickly. As a result, Chapter 7 bankruptcy may be looking like a needed option for more people as they face unprecedented times.

Though it may seem to some as if they have done something wrong by needing to file for bankruptcy, this debt relief option can actually offer many benefits. Chapter 7 typically takes less time to complete than other forms of bankruptcy, and it allows for qualifying debts to be cleared entirely, meaning that individuals do not have to repay those debts. Of course, this option is not for everyone, and there are certain qualifications that each person considering this option must meet.

Some of the steps and requirements involved with filing for this type of bankruptcy include the following:

  • Going through bankruptcy counseling before filing
  • Passing a means test to determine whether the person’s income level qualifies for Chapter 7
  • Filing a petition for bankruptcy with the appropriate court
  • Attending a meeting of the creditors to answer questions about outstanding balances
  • Completing a financial management course
  • Having approved debt discharged by the court

Though Chapter 7 bankruptcy takes less time than Chapter 13 or others, it is still a lengthy and involved process. Arkansas residents considering this debt relief route undoubtedly want to ensure that it is right for them and that they understand what is involved before getting started. Fortunately, they can work with knowledgeable attorneys who can explain the qualifications, how to petition the court and what to expect from the process overall.