It seems that prices are going up on everything. The monthly news about the costs of gas, groceries, or other goods is rarely one that benefits consumers. Many people with financial stability can take these kinds of gradual hikes in stride, but if you are already operating in the red due to excessive credit card debt, a few more dollars at the grocery store can have a big impact on your family. Because you are the provider for your children, they look to you to care for them. Do they too often see anxiety in your face as you approach the checkout line? If so, you are probably tired of living hand to mouth and carrying the heavy weight of credit card debt around your neck. Chapter 7 bankruptcy might just be the choice that frees you from this kind of desperate living.

What is Chapter 7?

Many people hear about the two most common forms of bankruptcy, Chapter 7 and Chapter 13, but don't know the difference between them. Chapter 13 is a restructuring of a person's debt, on which he/she makes monthly payments for several years before having the bulk of it forgiven. It works well for those who have steady incomes but can only pay part of their overwhelming debt. Chapter 7, however, is known as "straight" bankruptcy; in other words, you are declaring that you can not pay your debts at all. This is probably your scenario if you cannot accommodate small increases in the cost of living.

How can Chapter 7 help me?

Chapter 7 bankruptcy wipes your financial slate clean. The moment your attorney files the case, your creditors must stop contacting you. During the next three to six months, a bankruptcy trustee will review your financial affairs, and you will appear in court to answer questions about them. At the end of the bankruptcy process, your debts are discharged and you have a brand new financial start.

Will I lose my house?

This may be the most common question asked by people considering bankruptcy. Theoretically, your assets can be sold to offset your debts. It is true that, in some cases, those filing Chapter 7 will have to forfeit their homes. However, if you do not have much equity in your house, it will not make financial sense to the court to seize and sell it, as the profit made on the sale would not pay down your debt significantly. Your attorney can advise you about the particulars of your circumstances.

Where do I start?

If you think Chapter 7 might be the solution for you, contact a bankruptcy attorney in your area and schedule a free consultation. He/she will review your total financial situation and then offer the best legal advice for you and your family. For more information, contact Licata Bankruptcy or a similar firm.