A Chapter 7 bankruptcy attorney helps people make a fresh financial start. Eliminating eligible debt allows these individuals to step into a more positive future. They can begin rebuilding their credit and financial stability.

Reviewing the Situation

The lawyer begins by reviewing all of the person's or married couple's outstanding debts as well as income and assets. This review determines whether they qualify for Chapter 7 and which debts can be eradicated. Chapter 7 bankruptcy covers unsecured debts like personal loans, credit cards, and medical bills.

Qualifying Obligations

Filing for bankruptcy does not eliminate unpaid child and spousal support obligations or overdue mortgage and car payments. Student loans are not covered and neither are certain tax obligations. If the person has accumulated new debt in the past six months, that might be excluded. That's because courts want to prevent people from intentionally borrowing money only to have the debt discharged in bankruptcy. 

Problems With the Alternative

The other most common personal bankruptcy choice is Chapter 13. That program involves a repayment agreement lasting three to five years, with the total divided into one monthly payment.

Many people don't qualify for Chapter 13. Their debt load is too high for their income to cover the required monthly payment. Also, some who technically qualify for Chapter 13 wind up with such a tight budget that managing finances becomes unworkable. The default rate is high; any unexpected significant expense can derail the plan.

Knowledgeable Advice

If a client qualifies for both programs, the bankruptcy lawyer evaluates the financial circumstances and helps with the decision. These attorneys know which program would be most advisable considering the income and debt level.

Bankruptcy attorneys also can provide advice on how the clients might begin raising their credit score. Many individuals delay seeking bankruptcy protection because they are afraid of what this will do to their credit. Yet their rating typically is already low because they have repeatedly been late on payments or have given up paying altogether. 

A New Beginning

Many people feel embarrassed about needing to file for bankruptcy. However, it's important to focus on the new beginning and the positive aspects. Being in continuous financial distress is harmful for a person's mental, emotional, and even physical health. After the slate is clean, the person is once again able to contribute to the economy by purchasing an affordable amount of goods and services instead of sending all earnings to essential bills and minimum credit payments.

Go to sites of bankruptcy lawyers to learn more.