Understanding Chapter 7 Bankruptcy
Chapter 7 bankruptcy is a personal bankruptcy that allows you to discharge unsecured debts and reaffirm certain secured debts. The difference between unsecured and secured debt is as follows:
- Unsecured Debt: Debt resulting from credit cards, hospital bills, lawsuit judgments, or loans.
- Secured Debt: Debt resulting from a home mortgage, vehicle loan or other assets
Do I Qualify for Chapter 7 Bankruptcy?
Most people who ask this question are experiencing financial hardship, such as:
- Owing significant medical bills
- Being overextended or “maxed out” on credit cards
- Facing abusive or harassing collection notices or calls
- Lacking enough income to cover monthly expenses
- Have a low credit score