Simply put, bankruptcy is a solution to the problem of having debts that you will never be able to pay back. Therefore, in certain situations, it may your best option for overcoming financial trouble. If you are an individual with few or no assets or a small business owner, Chapter 7 bankruptcy may be your best option
Chapter 7 bankruptcy is also sometimes called ‘straight bankruptcy.' It liquidates all your assets and the cash from those assets is used to pay off the creditors. However, there are many pros and cons to consider before deciding for a Chapter 7, which an experienced bankruptcy attorney could explain to you in detail.
Almost all assets that are not exempted from bankruptcy will be sold to pay off the creditors. Although, under the exemptions, most states allow the debtor to retain some of their private property. Bankruptcy will not relieve you from paying alimony or child support or any student loan debts.
The bankruptcy process only takes a total of three to six months, giving you relief from most debts and a fresh financial start. If you proceed to obtain a Chapter 7 discharge, you cannot refile for bankruptcy for the next six years.
Deciding when to declare bankruptcy can be a difficult and confusing time for many. You could benefit from consulting a qualified lawyer in this matter. An attorney will help you with the tricky financial matters and advise on which type of bankruptcy to file for as well in an effort to find the best solution for your situation.