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Can Chapter 7 help Sacramento families with financial challenges?

Life is expensive! Between essential living expenses like mortgages, groceries, gas and unexpected costs related to health care and life in general - it can make finances extremely tight. Actually, it can leave many Sacramento families in the red, meaning their costs exceed their income. While this can happen every once in awhile without major consequences, multiple instances or prolonged periods of time in which costs outweigh income can result in an unwanted financial situation.

This unwanted financial situation is also known as debt. Debt can be a healthy part of finances, to a point, but when it gets out of control, it can quickly take over a person's life in a negative way. Chapter 7 bankruptcy allows a person or family to consolidate or eliminate personal debts acquired from a multitude of expenses. Credit card debt, medical debt and other debts can be eliminated or reduced to a manageable payment plan.

Chapter 7 is an attractive option for families because it can help get their finances to a better place. Also, in Chapter 7, a person can opt to exempt property; property that is 'exempt' from the bankruptcy process means that it can be discounted from the asset reallocation process. This would mean a person could possibly keep their home if it qualifies for an exemption under Chapter 7 personal bankruptcy. This could be a very valuable benefit in this situation for many families struggling with finances, especially if bank repossession is looming.

Debt can happen to anyone at anytime. Some debt builds gradually; other times it happens overnight, a once favorable financial situation gets turned upside down by an unexpected event like a medical emergency or other unexpected event. There is a way to right the ship financially, so to speak.

Source: FindLaw, "Exempt vs. Non-exempt Property Under Chapter 7," Accessed Nov 6, 2017

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