Debt is part of a healthy financial snapshot for an individual and for a business. Ask any financial analyst, and they will tell you that a certain portion of a person's financial portfolio should include some percentage of debt. However, there is a point where debt can get out of control and make it difficult to make ends meet. It might be time to look at personal bankruptcy as a way to get your personal financial situation back on track.
Chapter 7 bankruptcy is a method many will explore or utilize as a way to get a better handle on their finances and, specifically, their debt. However, some people will not be candidates for Chapter 7. Those situations include people whose income is too high.
Other potential Chapter 7 candidates can be eliminated if the filer can repay some debt, their debt was previously discharged through bankruptcy proceedings within the last eight years or the debtor has been accused of defrauding creditors. While repaying debt is a good thing, to qualify for Chapter 7, a debtor cannot have other disposable income available that would allow them to repay some debts that would otherwise be discharged. If you haven't filed for Chapter 7 bankruptcy recently and are completely unable to repay debt, Chapter 7 is likely a good option for your financial situation. Each person's situation will be examined and scrutinized during a bankruptcy filing to determine if they are an eligible candidate.
Understanding what can be gained from a bankruptcy and what the potential downsides are can help a person come to the best decision for them and their family. Financial health is important and, sometimes, it can get out of whack if too much debt is present. Whatever the circumstances, consider Chapter 7 bankruptcy as a means of debt relief.
Source: FindLaw, "Who Can File for Chapter 7 Bankruptcy?," Accessed May 7, 2018