The Benefits of Chapter 7 Bankruptcy

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.