Debt can be an unbearable burden on a family that is struggling to make ends meet. On top of the bills that must be paid in order to keep a roof over one’s head, an individual may watch their credit card bills grow, their medical bills fall farther behind, and their other debts increase due to interest and fees. When Maryland residents can no longer manage their debts on their own, they may consider bankruptcy as an option to move forward.
Bankruptcy can take on many forms, and one of the most commonly used forms of personal bankruptcy in the United States is Chapter 7 bankruptcy. Readers of this post are reminded that no legal advice is provided herein, and help with any bankruptcy matters can be sought from knowledgeable bankruptcy and debt relief attorneys.
Chapter 7 bankruptcy: The liquidation process
Chapter 7 bankruptcy is often referred to as liquidation bankruptcy because individuals who pursue it generally must sell off some items of property, or liquidate their property, in order to satisfy their creditors. It can be overwhelming to consider losing many of an individual’s items of personal and real property, but under the law exceptions, also known as exemptions, allow Chapter 7 debtors to keep what they need to survive.
Exemptions to liquidation
If an individual had to sell off everything that they owned in order to pay their creditors, they would not be in a better financial situation than before they sought Chapter 7 bankruptcy protections. Exemptions allow individuals to keep important property, such as their primary vehicles, clothing, appliances, and public benefits, so that they can continue to live once their bankruptcy proceedings have ended.
Chapter 7 bankruptcy can be a useful legal tool for individuals who cannot get ahead of their debts on their own. It is, however, a legal process and brings with it certain requirements. Before starting down the path to Chapter 7 bankruptcy it can be useful for debtors to speak with bankruptcy and debt relief attorneys.