Chapter 7 bankruptcy protection, and how to qualify for it, is important for struggling consumers to understand and to be familiar with. Unexpected circumstances can lead to mounting debt in some instances which is why consumer bankruptcy options are available to protect struggling consumers.
Personal bankruptcy protection serves as a valuable resource to individuals struggling with debt which is why they should understand how the process can help them. They should also understand that there are different personal bankruptcy options available for different situations and circumstances. One of the most important benefits of filing for bankruptcy protection is not only debt relief but relief from creditors. Once the filing party has filed for Chapter 7 bankruptcy protection, an automatic stay prevents creditor collection actions while the bankruptcy process progresses.
Chapter 7 bankruptcy works by providing a process that allows the filing party to turn over assets they do not exempt to the bankruptcy trustee for liquidation to repay creditors. This blog recently discussed the important role the bankruptcy trustee plays in the process. There are certain categories of property that the filing party can exempt from the process so they should also be familiar with what those are. There is the possibility, depending on the circumstances, that the filing party will not have to give up any property if it all qualifies for an exemption.
Struggling consumers considering bankruptcy protection should also understand how to qualify for Chapter 7 bankruptcy which uses the means test to determine if the filing party is eligible to file. When a struggling consumer has fallen on hard times, personal bankruptcy options, and knowing how to take advantage of them, can help guide struggling consumers through to debt relief.