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Student loan debt can lead some to file for Chapter 7 bankruptcy

Many American families still consider a college education to be an essential component to becoming an adult. In fact, some students are willing to go into serious debt to achieve a college degree, and believe that they will have improved job prospects once they have that piece of paper in their hands. In reality, however, the job market is not always as lucrative as many believe, and quite a few college graduates in Arkansas and elsewhere are faced with unmanageable debt. While bankruptcy can offer relief, many people try many other debt relief options before turning to Chapter 7 bankruptcy.

When is the right time to seek Chapter 7 bankruptcy?

In the early stages of financial distress, many Arkansas residents firmly believe that the situation is only temporary and that it will be possible to fulfill any outstanding financial obligations. They don't consider Chapter 7 bankruptcy as an option or feel that it is a last ditch effort, at best. As time goes on, things may shift and that optimism can fade. This is especially true for consumers who have tried and failed to work with their banks to have a loan restructured.

One Chapter 7 bankruptcy success story

When faced with financial difficulties, many in Arkansas fail to understand the power that bankruptcy can have. Others understand the benefits of Chapter 7 bankruptcy, but they feel that filing is some sort of mark of failure. Many people assume that individuals who seek bankruptcy protection are somehow irresponsible or cannot achieve any level of success.

Chapter 7 bankruptcy and the sole proprietor

When a small business owner falls into financial turmoil, the matter can quickly escalate. For many in Arkansas, personal and business finances have become so entangled that problems in one realm can quickly lead to problems in the other. When it becomes clear that the business cannot survive, Chapter 7 bankruptcy offers a means of eliminating both personal and business debt.

For many, medical bills are resolved by Chapter 7

Being subjected to an unplanned illness or injury is a leading cause of financial distress. In recent years, medical debt has been a causal factor in the majority of bankruptcy cases, and there are many Arkansas residents for whom Chapter 7 is the only means of eliminating the debt burden brought on by medical bills. While each and every set of circumstances is unique, many people will eventually seek bankruptcy protection in response to these expenses. The following tips are offered to those who would like to try and reduce their medical debt on their own.

Even after Chapter 7, zombie debt can linger

When it comes to personal bankruptcy, one of the most powerful motivating factors for consumers is the chance to have many forms of debt eliminated through the discharge process. Once a Chapter 7 bankruptcy is complete, the consumer is no longer responsible for debts that were discharged. Having the chance for a fresh financial start is what draws Arkansas residents to seek bankruptcy protection in the first place.

Chapter 7 bankruptcy can put an instant stop to wage garnishment

Financial hardships are known to bring about high levels of stress that can devastate Arkansas families. Once debts become overwhelming, harassment from creditors and the threat of imminent legal action typically escalates the tension. Considering the potential solutions may prove difficult and confusing; however, being fully informed about one's legal rights and the pros and cons of various options, such as Chapter 7 bankruptcy, may allow one to make informed decisions.

The impact of personal bankruptcy on an Arkansas business

A business bankruptcy is different than a personal bankruptcy, and Chapter 7 may have different implications based on the structure of the business an individual operates when personal bankruptcy is being considered. If a company uses Chapter 7 to deal with unmanageable debt and financial difficulties, the business will close. However, a personal filing of Chapter 7 does not result in the termination of a business run as a sole proprietorship.

Filing chapter 7 bankruptcy in Arkansas

Many people are hesitant to file Chapter 7 bankruptcy due to some misconceptions about what it actually entails. Although Chapter 7 is also known as a liquidation bankruptcy, many categories of property are exempted from the liquidation, allowing debtors to keep certain items of property. Debtors should still expect that they will lose non-exempted property they may own, however.

Is credit counseling before filing for bankruptcy necessary?

Federal bankruptcy laws mandate that people who wish to file for bankruptcy must complete an approved credit counseling course within 180 days prior to filing. Additionally, after the bankruptcy is filed and prior to being able to receive a discharge, debtors must also complete a debtors education course.

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