Chapter 7 Bankruptcy

Bankruptcy falls victim to all sorts of misinterpretations. In truth, it was designed to relieve certain debts and give individuals a fresh start. It should be seen as a way out rather than a punishment. In fact, a survey by American Bankruptcy Institute showed that 93% of Chapter 7 applicants were able to protect all their assets, including home and car, as state laws known as exemptions protect your interest in your home, your car, and your household goods.

So, if done properly Chapter 7 really can be a “fresh start” for someone and not a time when they lose everything.

Let’s go over some of the other pros of filing for Chapter 7 bankruptcy.

Debt Relief

The undeniable upside to filing for Chapter 7 bankruptcy is the debt relief it provides. It has the power to lift a major burden off your shoulders in just a few months. Most unsecured debt can be discharged, including credit cards, medical bills, and personal loans.

Individuals, self-employed workers, small business owners, and corporations may all file Chapter 7 bankruptcy. Relief is available regardless of how much you owe; there is no maximum limit that disqualifies you from filing.

No Collections or Repossessions

Filing Chapter 7 Bankruptcy automatically stays collection actions. This forces creditors to stop any lawsuits, wage garnishments, and phone calls. The bankruptcy Court will alert all of your creditors, and it is a violation of federal law to have any direct contact with you after you file.

Credit Flexibility

If you’re considering bankruptcy, you’re in a tight position and credit is hard to come by, as nobody wants to loan money to underwater borrowers. As odd as it may sound, though, you will be a better credit risk once you file for bankruptcy protection than before you file. If you look at it from a lender’s point of view, it’s easy to see that it would be better for them (that is, they are more likely to get paid) if they are dealing with an individual or couple who has filed bankruptcy - and who has no remaining unsecured debt - than it is trying to deal with an individual or couple who is struggling to pay multiple creditors.

Some lines of credit are easier to get your hands on than others. For this reason, it may be wise to apply for a secured credit card, which can improve your credit score when you pay your bill on time, each month. Part of the process involves going through a credit counseling session on line, at which time they will walk you through the ways to rebuild your credit after you file.

Quick & Easy Processing

The entire process can be done in less than three months. There is no Court appearance; no trips to a courtroom. There is only one brief Zoom meeting (10-15 minutes) with a Court appointed attorney known as the Trustee. When hearings are scheduled, they go so quickly that the Court sets them 15 minutes apart on the day the hearings are conducted.

This is a good thing since the sooner your debts are cleared, the sooner you can begin the road to re-establishing good credit and healthy finances