Chapter 7 bankruptcy is the most commonly filed bankruptcy. It offers many benefits to debtors who want to get out from under the burden of debt. Below we explain 3 of the most important benefits of filing Chapter 7 bankruptcy.
Stops Creditor Harassment
As soon as you file your Chapter 7 bankruptcy a temporary injunction (automatic stay) goes into place. This means that for the duration of your bankruptcy case the creditors you filed bankruptcy against cannot contact you to collect the debt you owe them. If a creditor contacts you, you can give them your bankruptcy case number and the contact information of your legal representative if you have one. From then on, any contact they make with you violates bankruptcy statutes. They could face penalties.
Once you complete your Chapter 7 bankruptcy case, creditors are permanently prohibited from contacting you about or trying to collect on the debts you discharged.
Eliminate Unsecured Debt at No Cost
Chapter 7 allows you to eliminate most of your unsecured debt. The types of debt that could be eliminated through your Chapter 7 bankruptcy include:
- credit card debt
- medical bills
- personal loans
- payday loans
- retail accounts
- unpaid utilities
If you complete your Chapter 7 bankruptcy case, creditors of the unsecured debt must discharge (write off ) the debt as paid in bankruptcy. As noted above after the discharge the creditors can no longer contact you about paying the debt.
Quickly Begin Your Financial Fresh Start
A Chapter 7 bankruptcy case filed in Alabama usually takes 4 to 6 months from the date a petition is filed to the date of debt discharge. So, in as little as 120 days your unsecured debts could get eliminated and you can begin your financial recovery. The money you once tried stretching to pay all your debts could now go to benefit your family.
You can also begin rebuilding your credit. Yes, the bankruptcy will show up on your credit report for 7 to 10 years. But, many lenders will see your freedom from other debt and be more willing to take a chance on you. They may charge you a higher interest rate, but if you responsibly make payments on time, your credit rating will continue to improve.
Getting Help from a Bankruptcy Lawyer
Filing Chapter 7 bankruptcy can be complex. There are various aspects to the bankruptcy law and each aspect applies differently to certain financial circumstances. To get the most benefits from filing a Chapter 7 petition you may need the help of an experienced bankruptcy lawyer. A bankruptcy lawyer will better understand how bankruptcy laws apply to your financial situation and the best actions you need to take.
Contact Brock & Stout’s bankruptcy lawyers for a free evaluation of your financial situation. Our lawyers have helped thousands of clients file Chapter 7 bankruptcy and gain financial freedom. Let our family help your family do the same.