Alternatives To Chapter 7 Bankruptcy

It should come as no surprise across the country during the current state of economic affairs that many individuals and corporations are finding themselves in financial distress. For many, the only type of relief that they can find comes in the form of filing for bankruptcy. Among types of debt relief, Chapter 7 bankruptcy is popular because it does not involve filing of a plan of repayment as with Chapter 13. However, individuals in debt should be aware that filing this type of financial hardship most often results in liquidation of their assets and loss of property.

As such, there are a few alternatives to Chapter 7 bankruptcy for individuals that are looking for significant financial relief from their burden of debt. For example, if you are an individual involved in a particular business or organization, you may prefer to keep that business up and running and avoid total liquidation of all assets associated with you or your name. Chapter 11 bankruptcy will allow you to seek adjustment of your debts, while retaining your personal and professional property. This type of financial relief may adjust the total amount that you owe or change the time period for repayment to be on more reasonable terms that are more manageable.

Chapter 13 bankruptcy is a type of financial relief that is available to individuals that have regular income. This allows the individual in debt to keep their home and refinances payment plans in order to help them catch up on back payments.

Additionally, there are certain situations in which filing for Chapter 7 bankruptcy may be deemed abuse of the system. If the individual is making more than the state median in the form of their current monthly income, they may be assumed to be presumptively abusive. Special circumstances must be shown in order to justify additional income or expenses that are beyond the allowed limits.

Lastly, there are a number of ways that an individual can regain financial freedom that do not involve filing for Chapter 7 bankruptcy or any form of bankruptcy. There are a number of financial organizations that offer out-of-court contract agreements in which they can help the individual pay back the money they owe and refinance existing debt to make it more manageable. There are also debt counseling services available in every state that can help an individual avoid filing for bankruptcy and keep them free of financial distress.

By: aabadie

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