If you are struggling financially and you have no assets to offer your creditors, you may qualify to file for Chapter 7 bankruptcy. You must pass what is called a “Means Test” first. If you do, here are some advantages to filing under this chapter.
Once you file, the “Automatic Stay” provision kicks in. This means that you are protected by the court and your creditors can no longer pursue action against you. This stops liens, foreclosures and other legal collection methods temporarily.
Your Unsecured Debt may be Written Off
Unsecured debts are things like your credit cards, utility bills and anything that is not backed by an asset. If your creditors do not dispute your bankruptcy, and even if they do in some cases, the court may write off all this debt, meaning you don’t owe it anymore.
You get a Fresh Financial Start
With your unsecured debt dissolved, you can start all over. Although it will take time, you will be able to rebuild your credit because your debt will be reduced or eliminated altogether. With a clean slate, you can pay your other living costs much easier.
These are just some advantages of filing Chapter 7 bankruptcy. When considering this or any other option, it’s best to seek the advice of proper legal counsel. Contact W. Mack Rice, Attorney at Law to go over your financial situation.