Filing for Chapter 7 bankruptcy is an event that will remain on your credit report for 10 years from the date of discharge, and this is a factor that sways many people from using it. While this may seem like a negative thing, there are several ways bankruptcy will actually benefit you. Here are three important benefits you should know about that may help offset the drawbacks of Chapter 7.
1. Chapter 7 offers an automatic stay
One of the reasons people end up filing for Chapter 7 is to stop all the harassment they are receiving from their creditors. When you reach a point in your finances where you cannot pay even the minimum payments on your bills, your creditors will be calling you all the time. They may even text you, email you, and call you at work. This is not only embarrassing, but it is also intimidating and overwhelming.
If you want this to stop, you could file for Chapter 7. Once you file, the court issues an automatic stay, which is basically an order that tells all your creditors to stop pursuing you for money. Your creditors must follow this order, and they must stop all forms of communications with you, including letters in the mail, emails, phone calls, and texts. Imagine the relief you could experience if your phone was no longer ringing all the time with calls from your creditors.
2. Chapter 7 offers a discharge
Secondly, you will have to pay to file for Chapter 7, but do you realize that most people are able to receive a discharge of many of the debts they owe? This discharge applies to all qualifying debts, including your credit card bills and any past-due medical bills you owe. If these are the types of debts you have, filing for Chapter 7 will automatically relieve you of paying these. This will free up your income and may even help you achieve a better lifestyle.
3. Chapter 7 gives you a fresh start
The other good news about Chapter 7 is that it offers a fresh start. You will no longer have creditors after you, and you will no longer owe money on a lot of your debts. Your credit may suffer, but you should realize that this is a temporary thing. Within just a few months or one year, your credit score might be higher than it was before you filed.
As you weigh out the pros and cons of bankruptcy, make sure you talk to a bankruptcy lawyer to find out exactly how filing would affect you. You can do so by contacting a firm and scheduling an appointment with a law office like Martinez Law Firm today.Share