For a considerable amount of time, many Louisiana residents may feel that they have solid control over their finances. They may think that they will never end up in a situation where their debt becomes too overwhelming, but a sudden event, such as job loss, could easily and quickly lead to substantial debt accumulation. As a result, some parties may end up considering bankruptcy.
After losing a job and amassing immense debt, Chapter 7 bankruptcy may be worth considering. This is the most popular type of consumer debt relief, and it is often beneficial to individuals who lack an income or have too little income to address their debts. Unlike Chapter 13, which utilizes a repayment plan, Chapter 7 involves the liquidation of assets. Liquidation means that nonexempt property will be sold in order to pay debts.
It is common for people to worry about how bankruptcy will affect their credit. It is true that following this route of debt relief will cause credit scores to fall, but in many cases, individuals’ scores are already on the low end due to their unpaid debt. Additionally, once parties get back on solid financial footing after bankruptcy, they could follow various avenues in order to rebuild their credit over time.
Finding the best way to handle considerable debt is a very personal decision. Some individuals may want to explore other avenues before giving Chapter 7 bankruptcy its due consideration. However, bankruptcy is a legal process, and successful cases can have immensely beneficial outcomes. If Louisiana residents are interested in finding out whether this relief route could work for their circumstances, they may wish to gain more information.
Source: wsoctv.com, “What is Chapter 7 bankruptcy?“, Craig Johnson, May 14, 2018