Bankruptcy is a last resort for many individuals in Oklahoma and across the United States. Some people file for bankruptcy due to accumulating debt that may come from student loans. Unfortunately, student loan debt has not been eligible to be discharged in Chapter 10 bankruptcy. However, if a new piece of legislation passes in Congress, this will change.
What is Chapter 7 bankruptcy?
Chapter 7 is one of the most common forms of bankruptcy. You have to prepare a list of all of your assets for the court and provide information on your income and finances. The court and the debt collectors will begin possession of your assets to pay off your debt. This means that you may eventually lose some of your property, even your home and your vehicle.
What is Chapter 10 bankruptcy?
Though it should still be a last resort, Chapter 10 bankruptcy is slightly more beneficial than Chapter 7 bankruptcy. It aims to give debtors a fresh start, reorganizing their debt in a different manner. The goal is to help debtors to pay off their debt rather than just sell all of their assets to pay off debts.
The U.S. Senate hopes to make changes to Chapter 10 bankruptcy laws via the Consumer Bankruptcy Reform Act of 2020. This will help debtors get back on their feet and pay off the debt over time.
Seeking legal help
Filing for bankruptcy is a very difficult decision to make, but it is sometimes the last resort that helps individuals reset their finances. If you have overwhelming debt, you may want contact a lawyer to learn more about your options for bankruptcy. A lawyer may help you understand all the latest changes in laws surrounding student loan debt.