Bankruptcy is certainly not a fun word to bring up in casual conversation, however, it is often given a much worse reputation that it actually deserves. Whether it is to finally get the collection agency off your back, or stop that pesky creditor from calling, bankruptcy can be a viable option for the right people.
Bankruptcy can pertain to more than one type of filing. One type is Chapter 7 bankruptcy, which allows you to dissolve, in some cases, all of your debt and still keep your assets protected from unrelenting creditors. Depending on your circumstance;, assets, such as your car, wedding ring and other fairly modest assets are protected when filing bankruptcy.
Unbeknownst to some debtors, bankruptcy is a federal law that every U.S. citizen has the given right to exercise. While there may be a certain social stigma about doing so, filing Chapter 7 bankruptcy is, by no means, a catastrophic event. In fact, Chapter 7 bankruptcy is the most filed form of bankruptcy.
Eligibility to file Chapter 7 bankruptcy directly depends on your annual income and the median income. If the income of a debtor falls below the median, then they are eligible. Otherwise, you have to prove that your means are dire enough.
If you have even the slightest bit of curiosity about bankruptcy and how it can get you out from underneath your debt, the best place to start is with a bankruptcy attorney. They can answer any questions you have and calm any fears about what will become of your credit score. Then, if you decide to go ahead, you will likely be instructed to file a bankruptcy petition with the U.S. Bankruptcy Court, which is located in various cities throughout California.
While some may think that Chapter 7 bankruptcy is a blemish that will stick on your name and credit score forever, the truth is, such a blemish is only finite. With that said, Chapter 7 bankruptcy can show on your credit report for a number of years, even up to a decade, after filing, but once that time is up, your credit score will be clear once again.