The Importance of Chapter 7 Bankruptcy
When one is in dire financial distress and is unable to repay debts to creditors he or she can opt to declare bankruptcy through a court order as a way of protection from some or otherwise all debts. It is not a common or even popular alternative due to the fact that it affects self-image, and future credit qualification, but a choice that people elect after deciding that they have gone through all other debt relief options without being able to find an otherwise credible solution. Creditors may be suing for debt that one is unable to pay; a home may be facing foreclosure during a catastrophe; job loss may have occurred and, in some divorce situations some people choose to declare bankruptcy.
Whatever the reason, many debtors preferably choose to file for chapter 7 bankruptcy since in most cases the debt is discharged from them. This does not happen anyhow but the debtor has to meet some qualifications first. This includes an income limitation. When you qualify, it means that you have to give up some valuable nonexempt property so that the assigned trustee can dispose of and to pay some creditors. As a debtor, despite losing some of your property you will be much advantaged and enjoy benefits as a result. Hence, Chapter 7 bankruptcy provides relief which will be able to put you back to a good financial position. For the myriad situations where you file for chapter 7 bankruptcy you will be able to enjoy many benefits it legally offers. Some of these are as considered below.
All your unsecured debts will be discharged from you. If your chapter 7 bankruptcy goes through, then you will have protection from your creditors and collectors. In this case you will have gained an automatic stay that prevents all collectors and debtors from demanding payments from you. All distress that is due will fall on the desk of the bankruptcy attorney’s desk. You will therefore be free from paying any unsecured debts. In this case you will not owe expensive medical bills and other debts that are collateral free. You will be free from the collection calls, and any form of harassment from creditors. Another importance of filing chapter 7 bankruptcy is that the process is fast, 3 to 5 months is the average time. This includes all the stages from filing to completion.
Another importance of filing for chapter 7 bankruptcy is that you can become eligible for credit once again. You are entitled to a recovery process when you are done with the filing and your credit rating will start rising once more. There is no specific duration for your credit to rise, and avoiding bankruptcy will only have negative effects on your credit score. Chapter 7 bankruptcy therefore comes as a relief to help you regain your financial tracks. Finally, filing for chapter 7 bankruptcy means that you will be able to keep your future income to yourself. After filing for chapter 7 bankruptcy, the income you earn will not be taken by creditors. Your normal life will be restored and you will be debt free.