When is debt a reason to file for Chapter 7 bankruptcy?
Most Tennessee consumers have debt, and for some, it can be an overwhelming financial burden. There are times when some people would suggest that debt is not a negative thing, but there is a line when any type of debt can become too much for a person to handle. At this point, a person would be wise to start thinking about ways to deal with debt, which may include filing for Chapter 7 bankruptcy.
What makes a debt good or bad really depends on how it impacts the financial health of the consumer. What some consider to be good debt are the types of debt that a person can manage with full and timely payments. These are balances that do not lead to financial distress or cause a person to pull money from another need just to make a payment.
Bad debt is often considered to be the type of debt that a person takes on from a place of desperation or an emergency. This automatically leaves a person at a disadvantage, trying to keep up with payments on a bill he or she couldn’t afford in the first place. This type of debt often snowballs, leading to financial issues in other areas, and potentially landing a person in a financial crisis.
If a Tennessee resident is struggling with bad debt, he or she may not be sure of where to begin to find a way out. Through a Chapter 7 bankruptcy filing, a person can deal with certain types of debt once and for all, emerging to a better and more stabling financial future. An evaluation of a person’s case can help him or her understand the legal options available.