What Happens When You File For Chapter 7 Bankruptcy

The Positive:

When filing for chapter 7 bankruptcy the goal is to wipe out all debts. Although not all debts are dischargeable, the majority of your debts will be dismissed if you do not have any extraordinary circumstances. Assuming your bankruptcy case proceeds normally, you can look forward to a chance to rebuild your finances.

When you file your bankruptcy petition with the court, a legal protection called the automatic stay takes action. This prevents creditors from contacting you, which means you will no longer have to deal with threats of debt collection over the phone or through the mail during your case.

Most exemptions allow you to keep most of your belongings. Motor vehicles (up to a certain value), necessary household goods and furnishings, pensions and many other factors can be saved from liquidation.

The Negative:

Chapter 7 bankruptcy remains on your credit report for 10 years. You could be denied the opportunity to open new credit lines during this time. Most people can expect to qualify for only high-interest, low-dollar-amount loans in the years following bankruptcy.

Many employers conduct credit checks for potential employees, and, unfortunately, some employers see a bankruptcy filing as reason to dismiss a potential new hire.

Declaring chapter 7 bankruptcy now means that you cannot file for another eight years. The eight years is counted from the date you last filed for bankruptcy. It is important to evaluate if your financial situation is dire enough for bankruptcy.

Pursuing Bankruptcy Without Consulting a Skilled Attorney Can Be a Costly Mistake

Bankruptcy laws are very complex and have undergone many changes in the last several years. The attorneys at Gower Law PLC can help you secure of a financial future.

Schedule a free consultation today and we can help you understand all of the options that are available to you.