Advantages & Disadvantages
Bankruptcy Attorneys: Belleville, IL

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Chapter 7 Advantages & Disadvantages

Chapter 7 Bankruptcy is an appealing solution for people struggling with debt. The thought of wiping out most of your debt is tempting. Even though you may qualify for Chapter 7 Bankruptcy, it may not be the best option for you. An experienced bankruptcy lawyer can explain all your options available to you, specific to your unique circumstances. Some people, for a variety of reasons, find Chapter 13 Bankruptcy to be a better choice for their situation even if they qualify for Chapter 7 Bankruptcy.

There are specific advantages and some disadvantages to both Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.

Advantages of Chapter 7 Bankruptcy

  • You get a fresh start! Only the exempt debt and any secured debt remain, so your expenses are greatly reduced.
  • There is no minimum amount of debt required to file Chapter 7 Bankruptcy.
  • Your bankruptcy is usually discharged in 3 - 6 months
  • Stops creditors' attempts to collect against the debt discharged in the bankruptcy
  • Except for inheritances and life insurance proceeds, any income you earn and property you acquire after the bankruptcy filing date are yours to keep

 

Disadvantages of Chapter 7 Bankruptcy

  • Chapter 7 Bankruptcy can only be filed once every 8 years.
  • Co-signers of a loan can be stuck with your debt unless they file for bankruptcy protection as well
  • The "automatic stay" created by filing Chapter 7 Bankruptcy is only temporarily stops foreclosure attempts
  • If you want to keep your car or home, and it is not covered by the bankruptcy exemptions, Chapter 7 Bankruptcy is not an option for you.

As you can see, there are some clear advantages and disadvantages to Chapter 7 Bankruptcy. There are some complex areas of law, such as exemptions, most people find confusing. An experienced bankruptcy lawyer can explain how the law applies to your specific situation so you can make an informed decision.

We offer a FREE Consultation with a bankruptcy lawyer so you can make an informed decision about what type of bankruptcy is right for you.

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