Benefits of a Chapter 7 Bankruptcy
Filing for bankruptcy can feel overwhelming and terrifying. However, Chapter 7 bankruptcy provides many benefits that once known may calm your fears and provide some optimism for your financial situation.
Understanding Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows a person to discharge most of their debts through a federal court process. While there are certain requirements a person must meet to qualify for a Chapter 7 bankruptcy, once a person goes through the bankruptcy process, many of their debts will be discharged, and the debtor can achieve a financial “fresh start”.
Discharge of Debts of Chapter 7 Bankruptcy
One of the greatest benefits of a Chapter 7 bankruptcy is the discharge of certain debts. Certain qualifying debts such as credit cards, medical debts, old taxes (in some cases), personal loans, payday loans (within a certain time period), utility bills, and in some cases even student loans can be discharged within a Chapter 7 bankruptcy. In many cases, filing for a Chapter 7 bankruptcy is the fastest and easiest way to eliminate overwhelming debt.
Other Benefits of a Chapter 7 Bankruptcy
While most people consider filing for Chapter 7 bankruptcy for the benefits provided regarding discharge of debts, there are many other benefits that accompany this discharge:
- Stop Creditor Calls. In most cases, people who are considering filing for Chapter 7 bankruptcy have a lot of debt, which usually means a lot of creditors trying to collect that debt. Chapter 7 bankruptcies allow for debtors to have an “automatic stay” once the bankruptcy is filed. This automatic stay will legally prevent any creditor from attempting to contact you regarding the collection of a debt. In fact, all calls, letters, communications, e-mails, and even wage garnishments must stop until the bankruptcy is completed. If a creditor contacts you after an automatic stay is in place, you can actually take them to court and file for damages against them.
- Keeping Your Home. Many people understandably are worried about losing their home when the bills begin to pile up. However, filing for bankruptcy will allow you to keep your home during the time period of the automatic stay. During this time, you will have some breathing room to make decisions that are best for you and for your family regarding whether to keep your home or sell it.
- Keeping Your Car. Many people who are considering bankruptcy are worried about losing their car, which is often their means of transportation for getting to work or getting their children to school. A Chapter 7 bankruptcy will also create an automatic stay for any repossession process. At this point, a debtor will have the choice of selling the car for something less expensive, or finding a way to pay for the vehicle during the bankruptcy process.
- Keeping Your Assets. In many cases, you will not lose any actual assets in a Chapter 7 bankruptcy, but you must take care. Every situation is different, and you should visit with an experienced attorney regarding your unique circumstance.
- More Money. After a Chapter 7 bankruptcy is over, many of your debts will be eliminated, thus giving you more income to pay for any debts that are not discharged within the bankruptcy, such as your home or car.
Contact an Experienced Bankruptcy Attorney
Contact the West Palm Beach bankruptcy attorneys at Kelley, Fulton & Kaplan at 561-264-6850 for a free consultation and to help you understand the benefits of a Chapter 7 bankruptcy and if that is a wise decision for your unique financial situation.