Trying to overcome mounting debt can be challenging, especially in the face of a job loss, medical crisis, or other financial disasters. You might feel overwhelmed and see no clear path forward. Fortunately, there are different bankruptcy options available that can help you rebuild your finances. When given an option, many people prefer to file Chapter 7 bankruptcy because it gives them a fresh start by discharging their debts and helps them recover faster.Â
Here, we will discuss the benefits of filing for Chapter 7 bankruptcy.
1. Chapter 7 Bankruptcy Gives Debt Relief
One of the primary benefits of filing for chapter 7 bankruptcy is the discharge of burdensome debts. Chapter 7 bankruptcy allows individuals to wipe out unsecured debts such as medical bills, personal loans, and credit card balances. This means that once you file for bankruptcy, you are no longer legally obligated to pay these debts. It gives you a clean slate for a new start.Â
With Chapter 7, you have no need for a repayment plan and commit your future income to pay off debts. It provides you with greater financial relief.
2. You Can Get a Fresh Start
By eliminating unsecured debts, Chapter 7 bankruptcy enables individuals to break free from the cycle of financial stress and get a fresh start. Since you no longer have to pay on these debts, your money is freed up. Many people see their credit score rise after filing for bankruptcy. Even though bankruptcy will remain on your credit report, its effect will lessen over time.
You will have the chance to show your creditors that you can handle credit responsibly. The Chapter 7 bankruptcy can be beneficial for those who have faced unforeseen circumstances such as medical emergencies, job loss, or other setbacks.
3. Retaining Most Property and Assets
Filing for Chapter 7 bankruptcy does not mean that you will lose everything you own. In fact, most people are able to keep their property, including cars and personal belongings. The bankruptcy laws provide exemptions for certain assets. It protects your assets from being liquidated to pay off creditors.Â
These exemptions generally include home equity, personal property, and retirement accounts. It means that individuals can retain some or all of their essential assets while still benefiting from debt discharge. It allows you to maintain a reasonable standard of living.
4. Chapter 7 Bankruptcy Gets You Relief from Creditor Harassment
When you have to pay debts, you may receive calls from creditors. These harassing communications can drain you emotionally and leave you feeling frustrated. A bankruptcy filing stops harassing calls and communications. Additionally, when you file Chapter 7 bankruptcy, there is an immediate pause put on any legal actions. This is because an automatic stay is granted once you file for bankruptcy. This order tells your creditors to stop contacting you, attempting to repossess your property, or trying to garnish your wages. The automatic stay provides you with immediate relief. It also allows you to focus on the bankruptcy process without the constant pressure from creditors.
