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What Are the Benefits of Chapter 7 Bankruptcy?

Are you facing insurmountable debt? If so, you might consider the benefits of filing Chapter 7 bankruptcy. While there are several different types of bankruptcy to choose from, Chapter 7 is the most popular option for consumers, and it can help you dissolve your debt for a fresh, debt-free start.

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy, also called liquidation bankruptcy, can provide you with debt forgiveness in exchange for the liquidation of some of your more valuable, non-exempt, assets. If you choose this method, your bankruptcy attorney can work with you to assess your qualifying debt and the assets that could be used to liquidate those debts. Once a set amount of the debt is “paid off” through liquidation, the rest can be discharged.

Who Qualified for Chapter 7?

Not everyone is eligible to file for Chapter 7 bankruptcy, only those who fit the income and debt requirements will be able to file. To determine whether you qualify, you must pass the means test. The means test will look at your household income for the past 6 months and determine whether it is higher than the average income in your area. If it is less than the median, you will most likely qualify for Chapter 7 bankruptcy. If your household income is higher than average, then part two of the means test will take a deeper look at your finances to determine if you have enough “disposable income” to pay a portion of your debt. If you do not pass step two of the means test, then Chapter 13 bankruptcy may be a better option for you.

The Benefits

Now that you understand the basics of Chapter 7 bankruptcy, it’s time to take a hard look at the potential benefits and weigh them against the downsides. If you’re considering Chapter 7 bankruptcy, it is extremely important to consider how it would apply to your situation, specifically, which is why discussing your case with an attorney is always the best option. That said, let’s take a look at the benefits of Chapter 7 bankruptcy.

Chapter 7 bankruptcy can be beneficial for several reasons, including:

  • A fresh start. Filing bankruptcy can help you get back on your feet, allowing you a chance to regain your financial footing as you use your assets to resolve past debts.

  • Fully discharge your debt. While other forms of bankruptcy only pay off a portion of your debt, Chapter 7 has the potential to leave you debt-free, depending on the type of debt you’re dealing with.

  • Stop collection calls and lawsuits. By filing for Chapter 7 bankruptcy, you can effectively put an end to those pesky collection calls and debt collector threats. Our attorneys can support your rights and prove that you are in the midst of filing bankruptcy to resolve your financial troubles.

  • Protection for your personal property. Although you can liquidate your cars or family home to resolve your debt in Chapter 7 bankruptcy, there are several rules in place that can help you protect those personal possessions. When you file bankruptcy, you can use those exemptions to protect the assets that mean the most to you.

Ready to get started? Our firm can help with your Chapter 7 bankruptcy case, or we can sit down with you and help determine the best course of action to resolve your financial situation.

Contact Law Office of Simon Goldenberg, PLLC today to get started on your case.