Because the United States is currently in a financial crisis due to the economic shutdowns taking place during the coronavirus pandemic, many people are now struggling to meet monthly debt payments. If you are among the many individuals fighting against debt and unstable finances, you may need to take positive action for debt relief. One debt relief option that is available to all individuals and businesses is the process of filing for bankruptcy. At Behm Law Group Ltd., we work with clients to support and guide them through filing for Chapter 13, Chapter 12 and Chapter 7 bankruptcy in Mankato, MN.
Bankruptcy is often incorrectly viewed negatively or as some kind of bail-out tool for big businesses. The truth is that bankruptcy is a highly important legal process that protects the economy from failure in many ways. Chapter 7 bankruptcy, in particular, is an essential process for sustaining and invigorating the U.S. economy.
Especially during these financially challenging times, Chapter 7 bankruptcy is important to both individuals and businesses.
- Individual consumers: Chapter 7 bankruptcy is a powerful debt resolution tool for individuals. This type of bankruptcy works to liquidate filers’ non-exempt assets in exchange for the discharge of certain debts. In most cases, however, the bankruptcy exemption laws are more than adequate to protect all property and all people lose are their debts. With the help of Chapter 7, filers are rid of debts that they would never be able to repay, such as high credit card debt and medical bills. Creditors are also protected in this process as they are paid in part from the value gained in the possible liquidation/sale of non-exempt assets. The ability to help both debtors and creditors is key in preventing economic impediments. Chapter 7 bankruptcy allows both parties to re-enter the economy and continue participating in that system more efficiently.
- Businesses: Chapter 7 bankruptcy is also important for business debt relief. When businesses file for Chapter 7, the process is similar to when individuals file. Business assets are liquidated in exchange for the discharge of all business debts. The major differences between business and individual Chapter 7 bankruptcies is that businesses usually close operations when they file and businesses do not have bankruptcy exemptions with which to protect assets/property. The closures of businesses that file for bankruptcy relief serve to eliminate continually failing companies from the economic network. The fact that businesses only file for Chapter 7 when they have absolutely no other options shows that it’s critical to have that bankruptcy process available when no other solution works. If a business cannot be revived, it is best for the economy to have it closed and have creditors paid as much as possible.
Chapter 7 bankruptcy is a powerful and essential tool that many people have used to receive relief from severe financial burdens. If you are finding it impossible to meet individual or business debt payments, consider whether filing bankruptcy might be right for you. Contact Behm Law Group Ltd. at (507) 387-7200 or firstname.lastname@example.org to learn more about filing for Chapter 7 bankruptcy in Mankato, MN.