The Benefits of Chapter 7 Bankruptcy

Reasons for why it is good to file chapter 7 bankruptcy. Today I got a call from a potential client that wants to file chapter 7 bankruptcy. She filed for chapter 7 bankruptcy six years ago but has to wait eight years by law to file chapter 7 again. She may qualify for chapter 13 bankruptcy but she insisted that she wants chapter 7.

That conversation made me reflect on the benefits of a chapter 7 bankruptcy. Both chapter 7 and chapter 13 are great ways to overcome debt and regain financial freedom. Today I want to focus on chapter 7. Here are some benefits to filing a chapter 7 bankruptcy.

Discharge all your Unsecured Debt

Once your chapter 7 bankruptcy goes through, you will be granted “automatic stay.” Automatic stay protects you from your collectors and creditors. By law, once you acquire an automatic stay, you are free from paying unsecured debts. You no longer owe expensive medical bills, high interest credit card payments, and other debts that are not accompanied by a collateral. Those debts are wiped away. No more garnishment, no more collection calls, and no more harassment from creditors.

The Process is Fast

The process of filing a chapter 7 bankruptcy can take as little as 3-5 months. This includes your initial consultation, your meetings with the attorney, credit counseling and debtor education courses, your 341 meeting with your attorney and the trustee, and your discharge notification from court. Those who file for chapter 7 bankruptcy can go from a stressful state with agonizing debt to a state of debt relief in less than half a year.

Become Eligible for Loans Again

After you’re discharged from your debts, you begin a recovery process. Your credit score will rise and, as that happens, you begin to qualify for loans again. There is no set time span for your credit to increase; nevertheless, avoiding bankruptcy and dragging debt will only deteriorate your credit. Bankruptcy provides an antidote to get your credit back on track so that you can qualify for loans again.

By Lincoln Law, Utah
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Josue Abarca is a legal assistant for Lincoln Law.

Copyright Lincoln Law

Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an experienced lawyer to understand current laws they may affect a case. For specific technical or legal advice on the information provided and related topics, please contact the author.

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