What should you know about Chapter 7 bankruptcy?

On Behalf of | Nov 15, 2022 | Bankruptcy

There are plenty of people in New Jersey and throughout the country who have been going through some uncertainty with their finances in recent months and years. The sources of the uncertainty can vary, from inflation to high gas prices and soaring interest rates, among others. But, for some people, the ultimate source of their financial uncertainty comes down to one thing: debt.

Mortgages, car loans, credit card debt and even student loan debt can leave New Jersey residents with a high amount of anxiety about how they will make their next round of payments. And, in some cases, the ability to make that next payment isn’t always a given. Debt can seem insurmountable at times.

Explore your options

That is where Chapter 7 bankruptcy can come into play. For those who are considering this option, knowing the basics about Chapter 7 bankruptcy and how it might help can be a crucial part of exploring all possible options to address debt.

Chapter 7 bankruptcy, commonly referred to as “liquidation” bankruptcy, is a process by which a filer can discharge most debts and get a “clean slate.” In a typical Chapter 7 filing, the filer will list all assets and debts, and then assets will be sold and proceeds from the sales will be applied toward debts. However, in reality, many of a filer’s assets are exempt from the bankruptcy process, which means the filer gets to keep those assets despite the bankruptcy filing. Any debts that are not paid off by the sale of assets are usually discharged.