If you’re struggling with overwhelming debt, you’re not alone. Every year, millions of Americans struggle to find a way to make ends meet. This can threaten nearly every aspect of their lives, and make everyday a painful struggle that in nearly unbearable. Fortunately, though, these individuals don’t have to give in to their financial struggles. In fact, they don’t even have to wait years to obtain the relief they need. Instead, they can pursue personal bankruptcy and secure the fresh financial start they deserve.
One of the quickest ways to obtain that relief is through a Chapter 7 bankruptcy filing. Since this type of bankruptcy requires the liquidation of assets in order to satisfy outstanding debts as fully as possible, many people are worried that Chapter 7 will leave them penniless. This simply isn’t the case. As we discussed in a previous post, there are multiple bankruptcy exemptions that provide a safety net for bankruptcy filers, but even if you have property that you want to keep post-bankruptcy that doesn’t fall into an exemption, you might still be able to keep it.
This is most often obtained by entering into a reaffirmation agreement. These agreements “reaffirm” the debt, meaning that the debt that would otherwise be discharged in bankruptcy will remain with you. In exchange, that asset won’t be sold off. So, if you have a vehicle or a home that you want to keep, it might be best to reaffirm the debt.
You need to be careful here, though, because you don’t want to fall back into a debt spiral. So, make sure you are up-to-date on payments related to that loan and consider negotiating lower interest rates, if possible. Also, be cognizant that reaffirmation can help your credit score post-bankruptcy, so it’s best to keep current on all payments.
Navigating bankruptcy can be stressful, but you don’t have to go at it alone. Instead, you can find assistance from a skilled attorney who is willing and able to put your interests first so that you can escape your debt burden and put you on the path to a new beginning.