If your finances are in shambles and you’ve tried everything to dig your way out of trouble, it may be time to learn more about Chapter 7 bankruptcy. It’s a last resort for many individuals, but once you learn more you may come to find that it’s just what you need.
Understanding the benefits of Chapter 7 bankruptcy will help you decide if it’s something that could help your current and future financial circumstances. Here are some of the most appealing reasons to file:
- A fresh start: Generally speaking, the Chapter 7 bankruptcy process unfolds over the course of four to six months. Upon completion, you have a fresh start with the ability to build a new financial life from the ground up.
- Avoid foreclosure: Upon filing for Chapter 7 bankruptcy, an automatic stay goes into place that stops creditors from collecting. This stops the foreclosure process for the time being, thus giving you time to review your situation and decide how to proceed. It may be just enough time to devise a plan to save your home.
- No repayment plan: Many individuals shy away from Chapter 13 bankruptcy because of the repayment plan that requires them to part with most of their expendable income in the future. Chapter 7 bankruptcy doesn’t share this component, so you’re in position to keep future income.
- The amount of debt doesn’t come into play: Unlike Chapter 13, there is no limit as to how much debt (secured or unsecured) you can have and still qualify to file.
- It’s fast: While the process as a whole typically takes six months, you can expect a discharge of your debts within two to three months of filing. It’s at that point that you really begin to see things come together.
When you weigh the benefits of a Chapter 7 bankruptcy against any potential drawbacks, you soon realize that it can help you in a variety of ways. As long as you’re comfortable with the process and have a plan for bettering your situation in the future, you’re in position to proceed with confidence.
Your goal is to use Chapter 7 bankruptcy to secure a fresh start, as this will help put your messy financial past behind you.