Chapter 7 bankruptcy is so common because it's so effective. Many ignore their opportunity to be free of debt, creditor harassment, and the nagging feel we all get when behind on bills. There are both advantages and disadvantages in filing Chapter 7. This guide points out both, while also explaining how the process works.
Advantages
Chapter 7 bankruptcy is about getting the fresh start you deserve. Many look down on bankruptcy. Look at it this way: it's your chance to take real help from the government, who you've likely been paying taxes to.
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The biggest benefit is monetary, of course. You can discharge almost all major debts, including credit card, medical, and mortgage. For example, you might have $10,000 in credit card debt, $25,000 in medical because you have no coverage, and you just lost your job. In such terrible moments, you have no options, right? No, because you can file and discharge all this debt and be able to use money from your next job to pay other more necessary bills.
Any personal bankruptcy also begins what's called an "automatic stay," which means creditors must stop collections against you, usually for several months. You may lose your home, simply because you can't afford the bill. You can, however, discharge the debt. And you get to stay in the home for quite often several months free until you can find a new place.
Creditor harassment is another nagging concern those in debt have. First off, if creditors are threatening you or calling all hours of the night, you have a right to sue. So be sure you are not dealing with some inappropriate harassment; consider it a crime against you. But, creditors have no reason to contact you if you file bankruptcy. They will stop calling in most cases, if not you can refer them to your lawyer.
Disadvantages
It was mentioned you might lose your home. You can discharge a mortgage debt, but you'll lose the home. You can discharge a car debt, but you will lose the car. In these cases, you can go outside the bankruptcy to pay on them if you have money coming in. if you have a valuable home and car, Chapter 13 bankruptcy may be better. Contact a lawyer.
You cannot discharge tax, child support, and alimony debt if you file. In these cases, again Chapter 13 may be a better option, but you still have to pay something.
How much does it cost?
Chapter 7 bankruptcy costs $299 to file. You also need an experienced bankruptcy lawyer to handle your case. It's too important not to hire one.
Why not Chapter 13?
Chapter 13 bankruptcy has advantages and disadvantages too. In most cases, Chapter 7 has more benefits, such as if you have no income coming in or if you have a lot of credit and medical debt. On the other hand, if you have a job and therefore some money coming in, and you want to keep valuable assets like your home and car, Chapter 13 is smart. Why? It can often stop a foreclosure and a car repossession. You have to pay some or all the debt, but over a period of 3-5 years.
Who can help?
You need an experienced bankruptcy lawyer to help. It will cost some money, but it's more than worth it. When you think about it, consider how much money you will save or how many assets you will keep if you file. The value of a lawyer has just gone up, hasn't it?
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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