Chapter 7 Bankruptcy has many advantages. Some of those benefits include:
The Chapter 7 Bankruptcy Discharge
The Chapter 7 Bankruptcy filer receives a "fresh start." The goal of a Chapter 7 Bankruptcy is to give the individual or married couple a new start. The elimination of certain debt frees the Chapter 7 Bankruptcy filer from personal liability for the discharged debt. However, some types of debt are not dischargeable, including student loans (unless the court rules otherwise), child support and alimony, certain taxes, and debts incurred by fraud. Certain liens on property, car loan, mortgage, a tax lien, or a mechanic's lien remain after the completion of Chapter 7 Bankruptcy.
Retention of your Assets
It is true that a Chapter 7 Bankruptcy puts your assets at risk of being liquidated by the Chapter 7 Bankruptcy Trustee. However, for most, if not all, Chapter 7 Bankruptcy filers their property will be considered exempt and will remain in their possession.
No limits on the amount of debt to be discharged
Unlike other forms of bankruptcy, a Chapter 7 Bankruptcy does not impose a limit on the amount of debt that a potential Chapter 7 Bankruptcy filer may have prior to filing.
No loss of Income
Unlike other forms of bankruptcy, income earned after the filing of a Chapter 7 Bankruptcy is not subject to the Chapter 7 Bankruptcy Court or the Chapter 7 Bankruptcy Trustee. Moreover, unlike other forms of Bankruptcy, there is no repayment plan in a Chapter 7 Bankruptcy and the Chapter 7 Bankruptcy filer does not have to repay a portion of the discharged debts.
Eliminates all Garnishments and other Collection Attempts
Chapter 7 Bankruptcy can eliminate garnishments. We have found that garnishments are often the last straw and a key factor in making the decision to file for bankruptcy relief. A Chapter 7 Bankruptcy immediately puts an end to the withholding and puts your income back into your pocket.
Chapter 7 Bankruptcy can put an end to creditors contacting you. Upon filing a Chapter 7 Bankruptcy, an automatic stay is put into effect which prevents further collection attempts against you. This means that all garnishments, lawsuits, repossessions and phone calls must immediately stop. Until your case is filed, creditors are not required to cease collection attempts, but we have found that advising them that you have retained our office often eliminates further phone calls.
Absent any unforeseen complication, most Chapter 7 Bankruptcy cases are closed within four months of the date of filing. Other forms of bankruptcy can take up to five years to complete.