Facing mounting bills and increasing debt can be a scary time in any individual's life. Fortunately, there are debt relief options available for individuals facing financial hardship. One option that is available is Chapter 7 bankruptcy. Chapter 7 allows a qualifying individual to liquidate and eliminate consumer debt.

To determine whether an individual qualifies for Chapter 7, the individual must take the bankruptcy means test. This test analyzes the individual's income and debt to determine whether the individual has enough disposable income to continue to pay creditors.

Newsworthy individual Casey Anthony is the latest public figure to seek bankruptcy protection. Anthony was involved in a murder trial in which she was first accused and then acquitted of killing her two-year-old daughter. Now free from jail, she filed for Chapter 7 bankruptcy protection Friday. Her filing claims that she has assets of $1,100 and liabilities of almost $800,000. Her liabilities include debts for attorney fees, investigative costs and fees, taxes owed to the IRS and court costs. She is seeking to have all of her debts discharged to get a fresh start financially.

Under Chapter 7 bankruptcy, almost all consumer debt can be eliminated. This includes credit card debt, medical bills, secured loans and mortgages if the individual filing is willing to lose his or her house. Another advantage to filing for Chapter 7 is that the process automatically stays creditors' actions. This includes stopping foreclosure actions; it will also stop wage garnishments and repossessions.

Some obligations, however, cannot be discharged under Chapter 7 bankruptcy. Some tax debts, child support and student loans cannot be discharged. Also, if the filing individual were found to have committed any improper conduct, the filer could be denied bankruptcy protection. Nevertheless, for individuals emerging from overwhelming circumstances, the benefits of Chapter 7 may far outweigh any debts still owed.

Source: Examiner, "Casey Anthony files Chapter 7 bankruptcy protection; says unemployed, no income," Rachael Monaco, Jan. 27, 2013