When someone says that their debt is killing them, it might sound like an exaggeration. Yet, it may be more accurate than you realize.
Debt is not only a financial burden. It can act as a considerable burden on your mental wellbeing. Many people have committed suicide because their debts became too much to handle.
Even if you manage to stay in control, it is impossible to remain unaffected by debt you cannot afford. The constant worry about making the next payment can take a toll on your sleep and stress levels. That, in turn, can leave you more susceptible to physical health issues. Going to the doctor or a mental health specialist can only do so much. To solve things, you need to deal with the root cause of the problem. Filing for bankruptcy is one way to do this.
Am I eligible for a Chapter 7 bankruptcy?
To file for bankruptcy under Chapter 7, you must pass a means test. It looks at your disposable income — what remains once you subtract specific payments from your monthly income. If your result is above the state average, you need to look at alternative options. If it is below, you can consider Chapter 7.
What debts does Chapter 7 erase?
Chapter 7 will cancel credit card debt, medical debt and personal loans. Here are three things it will not cover:
- Outstanding court fees
- Outstanding child support payments
- Student loan debt
Having any of those ineligible debts does not mean you should rule out filing for bankruptcy. If you can get rid of your other debts, it gives you a better chance of paying the excluded ones. If you believe Chapter 7 bankruptcy could help, it is crucial to learn more about its advantages and disadvantages.