There are different types of bankruptcy for different types of debt problems. Chapter 7 is the type of bankruptcy filed by most people. It is sometimes known as “liquidation” or “straight bankruptcy.”
In Chapter 7 bankruptcy, a person’s debts can be “discharged” which simply means forgiven or wiped-out.
Chapter 7 works extremely well for “unsecured” debts such as credit cards and medical bills. It also works well for “secured debts” such as home loans and car loans if you are willing to surrender your house or car to the lender. If so, you can give the house or car back and not owe another penny.
Be aware that Chapter 7 is not able to wipe-out all types of debt. For example, domestic support obligations such as alimony and child support are non-dischargeable in Chapter 7.
The catch in a Chapter 7 bankruptcy is that in exchange for having debts forgiven or discharged you must give up certain types of property. However, the good news is that most people do not lose any property when they file Chapter 7 bankruptcy. This is because Oklahoma laws known as exemption statutes allow a person filing Chapter 7 bankruptcy to keep or “exempt” certain property. And the majority of people filing Chapter 7 bankruptcy simply do not own the type of property which would be taken from them in bankruptcy.
To be on the safe side, a person thinking about filing bankruptcy should seek the advice of a knowledgeable bankruptcy lawyer. If it becomes clear that you have property that could be taken from you in a Chapter 7 bankruptcy, then you must decide whether it would be worth it to give up the property in exchange for having your debts forgiven. If not, your attorney can advise you about other available options including Chapter 13 bankruptcy.
If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.