Chapter 7 bankruptcy seeks to eliminate credit card debt, medical bill debt, judgments, and debt due to utilities and repossessions. All those debts disappear and, in most cases, people are able to keep their property, such as their primary residence and vehicle, as long as they can make payments on them moving forward. It also allows for the reinstatement of your driver’s license if needed. All of that can be incredibly helpful under the right circumstances. So, how do you know when is the right time to file for Chapter 7 bankruptcy in Milwaukee? We explore some common scenarios that might warrant a Chapter 7 bankruptcy filing below.  

When You Have More Debt Than You Can Manage 

The simplest reason to consider filing for any type of bankruptcy is when you have incurred more debt than you can manage. For Chapter 7 bankruptcy specifically, this debt can be in the form of credit cards, medical bills, and utility back payments or be associated with things like judgments and repossessions. Chapter 7 bankruptcy can wipe out unsecured debts, leaving you with a fresh financial slate. If you are unable to pay these bills and still eat, filing for Chapter 7 bankruptcy may be a smart move to get yourself back on track. 

There are often questions about the effects of bankruptcy on credit scores and credit reports. While the effect filing bankruptcy will have on your credit is not cut and dry, those who are struggling to pay their debts generally do not possess the best credit scores, to begin with. And, while bankruptcy can drop your scores, you should also be in a better position to recover them once your bankruptcy has cleared.   

If You Have Been Threatened With Eviction

If you are facing eviction from your Milwaukee rental unit, you do have options. While filing for Chapter 7 bankruptcy will not necessarily stop the eviction, there are some notable advantages it can offer. Mainly, you may be able to file for bankruptcy to delay the eviction process. Because a bankruptcy filing can afford you the opportunity to pay past-due rent and further negotiate with the landlord, you can buy yourself significant time and may even reach an agreement that allows you to stay much longer. 

Because there are a number of factors that can affect the success of an eviction delay or a full stop of eviction, it is important to talk with a bankruptcy lawyer to discuss your situation and your rights before proceeding. 

If You Are Facing Foreclosure On Your Mortgage

The advantages of filing for bankruptcy when facing eviction are similar to those provided to individuals facing foreclosure. Of course, foreclosure presents a more long-term financial upset and should be treated accordingly. Thankfully, you can secure your ability to live in your home for longer by filing for bankruptcy, which issues an automatic stay on the foreclosure process if it is not too far along. 

Unlike Chapter 13 bankruptcy (more on this below), Chapter 7 bankruptcy will not stop foreclosure if you are already delinquent on your mortgage. However, Chapter 7 bankruptcy allows you to remain in your home for at least a portion of the time it takes for the bankruptcy to clear, if not longer.    

Another Option: Chapter 13 Bankruptcy

If the above situations or other Chapter 7 offerings are not what you are looking for, Chapter 13 bankruptcy may have the answer. This is another type of bankruptcy that provides a restructuring of your debts rather than an outright elimination of them. It can afford you proportional debt relief as well as more time to pay off debts, including child support and mortgage payments. Indeed, Chapter 13 allows you to establish a repayment plan for your unpaid mortgage, one that will be achievable for you. This type of bankruptcy generally stipulates that you pass the means test to ensure you will be able to make the diminished payments you promise. 

Contact The Bankruptcy Law Center To File Chapter 7 Bankruptcy

If you are planning to file for bankruptcy, one of the most important things you can do is choose a bankruptcy attorney to support you through the process and help you better understand what qualifies for Chapter 7 bankruptcy. When it comes to retaining your shelter while seeking debt relief, you do not want to take any missteps or misunderstand what exactly you need to do. Contact The Bankruptcy Law Center today to get started with your free bankruptcy case evaluation.