Bankruptcy vs debt consolidation, which one is right for your current debt problems?

Ever wondered what Chapter 7 bankruptcy is? Well if you are, I think this article will help. Well, Chapter 7 bankruptcy is a type of bankruptcy that is available for people to file under the Bankruptcy Code. However, this type of bankruptcy is not available to everyone. Want to know more? Read on. Chapter 7 bankruptcy is available to individuals and some businesses. In order to file Chapter 7 assets should be limited to those that can be claimed as exempt.

Usually (depending on the situation), individuals try to file for bankruptcy under Chapter 7 in order to get most of their outstanding debts discharged. The time taken to do this is also quite less as compared to filing under Chapter 13. You can file for bankruptcy under Chapter 7 only if you pass the Means Test. Unlike Chapter 7, filing under Chapter 13 will give you the chance to repay your outstanding debts over a longer period of time, usually between 3 to 5 years. You also have the chance to keep all your property.

There is some confusion of what exactly chapter 7 bankruptcy actually is and this confusion sometimes leads to people making critical errors in judgment when the individual contemplates such a filing. The term Chapter 7 bankruptcy is a term that is thrown about a great deal in the media, but clear and concise explanations of the term are usually not offered.

For those who feel that they are in serious financial distress, bankruptcy may have crossed their minds. Bankruptcy is not something to be taken lightly. While your debt may be wiped clean, there are far-reaching consequences for that “new freedom”. When a person’s debt has risen to a level that they can’t hope to get under control, they may consider filing for bankruptcy. For a consumer there are two bankruptcy choices: Chapter 7 and Chapter 13.

If you are overwhelmed by debt, there are a number of solutions. The most drastic of these is filing bankruptcy. I want to encourage you to make sure that you have examined all of the available options, including credit card debt couseling, debt settlement and negotiation before you go down this road. In recent years, the stigma surrounding filing bankruptcy has lessened somewhat. However the effects are financially devastating, and long ranging.