Chapter 7 Bankruptcy benefitsFiling for Chapter 7 bankruptcy is arguably the best plan for eliminating debt. It can wash away certain types of debt for good, cleanse you of your stress and financial worries, and free up income for your family. Best of all, it can give you a fresh start to rebuild your credit.

Here’s a more complete list of what Chapter 7 can do for you:

  • Eliminate certain types of debt permanently
  • Get rid of debt stress and worry
  • Keep and protect property you want to keep
  • Get out from under debt on property you are willing to say goodbye to
  • Stop lawsuits, creditor harassment and garnishments
  • Free up income for your family
  • Get into a position to earn more money and save
  • Let you start to rebuild your credit

Those debts that you can erase: Chapter 7 bankruptcy will allow you to get rid of unsecured debts. Examples include credit card debt, medical bills and bank loans. Not only does it eliminate the debt, but also it gets rid of the interest you owe for those loans.

Keeping property you want to keep: Bankruptcy laws include “exceptions,” which are things that a person can keep and still file bankruptcy. Each state has different exemptions, but most Texans generally keep everything, including their homes, when they file Chapter 7 bankruptcy. For more information and cautions on exceptions, click here.

Why is the law structured to allow this? Because Congress didn’t ever want people to give up hope. When people feel trapped and helpless, they become unproductive members of society. To avoid this from happening, the government created a way for people to effectively start over again.

Words of Warning 

As with all things, there are a couple of things you should be aware of before filing Chapter 7 bankruptcy.

  1. Getting a specialized attorney that focuses on bankruptcy is crucial to achieving the results you want. Since bankruptcy laws are complicated and constantly changing, it’s in your best interest to have someone that works with bankruptcy day in and day out.
  2. Results will vary. Although everything listed above is a benefit of Chapter 7 bankruptcy, that doesn’t mean that everything can all be achieved at one time for every person. Things that will affect the outcome: your choice of attorney and your goals, assets, debts, current income, and current expenses. Just remember that every situation is different.

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