Fresh out of graduate school, you found work in your field. But this is, after all, the gig economy. Your job is as a contractor, and you do not benefit from all the perks that full-time employees get. For example, no health benefits. But this may be the least of your problems now.

With the COVID-19 crisis, the work has dried up, and the job abruptly and unceremoniously ends. Then a life-threatening health crisis strikes you, and you face a lengthy recovery. On top of that, you still have significant credit card debt. You have been hit with the trifecta that nobody wants: job loss, costly medical bills and credit card debt.

An initial step toward recovery

Faced with what is likely a once-in-a-lifetime situation, you must consider the realistic option of personal bankruptcy. Overwhelming consumer debt such as medical and credit card debt can be overcome. In this situation, Chapter 7 bankruptcy may be the most likely choice.

Here are some key things to know about Chapter 7 bankruptcy:

• People who are unable to pay back their debts or have limited income prefer this bankruptcy path.
• Under this “straight-ahead” bankruptcy, people must sell most of their assets in order to repay all creditors.
• You can keep some of your income and property. However, the chances do exist that you may lose your car or home (if you are a homeowner). But as long as you maintain regular payments on car loans and mortgages, you can keep them.
• This bankruptcy will remain on your credit report for 10 years.

The triangulation of a job loss, health scare and credit card debt may represent one of the worst-case life scenarios for a young professional. Overcoming this will not be easy, but it is possible. Getting your physical, emotional and financial house in order is crucial. Filing for personal bankruptcy is among the first steps toward recovery.