While this topic is explained at length here "CHAPTER 7-BANKRUPTCY" that section is more technical than this section. Here I attempt to give you insight into what Chapter 7 is really all about.
Chapter 7 bankruptcy is not just calling it quits on your creditors. It is not “giving up.” Chapter 7 should only be filed after a rigorous, methodical and objective view of your finances shows you cannot repay the debt in full. Then it is a realistic remedy not just for you, but for your creditors as well.
If you’re paying just the minimum payments on your credit cards because that’s all you can afford, you will probably never pay them off. This happens for two reasons. First, the minimum payments are designed to pay mostly interest. The principal is reduced about as slowly as a child nibbling on the vegetables on his or her plate. Second, it is too easy to put new purchases on those credit cards when the inevitable financial hiccups arrive.
If you never pay off your credit cards, the credit card companies love you, but they are in denial too. They have a loan on their books that presumes it can be paid off. If you’re struggling just to make the minimum credit card payments that will never happen. So while the interest payments are an expense you’ve learned to live with, it is almost pure profit to the bank that lent you the money, as to how they book it in their finances. They are ignoring the day of reckoning when you wake up to the fact that you have become enslaved to them without any realistic prospect of getting free of them. Some deluded souls have actually committed suicide as an escape instead of bankruptcy, which is truly tragic considering that as a society we have an escape valve built into the system, and they did not value their lives more than other people’s money.
Chapter 7 is the ultimate reality therapy. It changes legal relationships between debtors and creditors, in effect creating a divorce well before death does you part. It merely puts the seal of validity on the fact you cannot repay your debts, and in exchange for getting real so that everyone is basing their financial assumptions on reality, both you and the creditors, you get your debt forgiven. If you have no assets that cannot be protected with exemptions then you lose nothing except your debt.
To figure out if Chapter 7 bankruptcy is right for you, all you need to do is call us and we’ll analyze your situation to see if you have a good case. We never try and “sell” you on a case. We just start analyzing from the first minutes you call and see if there is a reason for further inquiry which we would continue in our office. If bankruptcy is not right for you we can usually tell you on the phone, and if we don’t find out until we meet in our office upon more inquiry that the remedy does not work for you we either go our separate ways or find another solution that will work for you.
