For anyone facing serious debt problems, there are many complex considerations. Should you file bankruptcy at all? If you do file for bankruptcy, should you file a chapter 7, a chapter 13 or other type of bankruptcy? What will happen after you file?
These are just a few of the common questions people have.
What you need to know about chapter 7 bankruptcy
While not everyone qualifies for chapter 7 bankruptcy, and it might not be the right choice for your unique situation, but there are a few distinct benefits to filing chapter 7, including:
- Debt liquidation: More than any other type of bankruptcy, chapter 7 is a liquidation bankruptcy. Rather than reorganizing your debts, it allows you to be free from unwanted debts so you can get a fresh start.
- A simpler process: Chapter 7 is a relatively quick and simple process compared to other forms of bankruptcy. In some cases, people are through the entire process with their debts liquidated inside of three months from the time they start. Not every case goes this quickly, but the process is generally painless and efficient.
- Freedom from creditors: One of the most important aspects of chapter 7 bankruptcy is the automatic stay, which is a law prohibiting creditors and their agents from engaging in any collections activities for the duration of the bankruptcy proceedings. This means they cannot call or contact you at all or move forward with any repossession or foreclosure efforts. The automatic stay works with all types of bankruptcy.
These are a few of the important factors of chapter 7 bankruptcy. Again, this is not the only option and not necessarily the best option for you. If you are facing serious debt problems, you should first talk with an experienced lawyer who can help you find the right solution for you.