Benefits of Filing for Chapter 7 Bankruptcy
Posted by tony lee on August 24th, 2016
You can choose between two options when filing for bankruptcy – Chapter 13 and Chapter 7. Chapter 13 involves a long three to five year repayment plan to pay your debts. Chapter 7 on the other hand, is much quicker. When you have a consultation with a bankruptcy attorney in Oregon, that attorney should explain the difference between Chapter 7 and Chapter 13 bankruptcy as well as the advantages of Chapter 7 bankruptcy over Chapter 13 bankruptcy, and any advantages of a Chapter 13 bankruptcy.
The first and the most important benefit of Chapter 7, as your bankruptcy attorney will tell you, is that you get rid of your unsecured debts, with a few exceptions. In simpler words, getting rid of your unsecured debts means you will never have to repay those unsecured debts. This is quite different than what happens when you file a Chapter 13 bankruptcy where you have a three to five year repayment plan. However, in a Chapter 7 and a Chapter 13 you can not get rid of unsecured debts such as student loans, unless you can convince a bankruptcy judge that it would impose an undue financial hardship on you to pay back your student loans. In a Chapter 7 and a Chapter 13 bankruptcy you also can not get rid of secured debts such as a mortgage and car loan, and still keep your home or car, if you no longer will pay for your home or car. However, if you
do not want to keep your home or vehicle, then you can rid of any balance owed on the mortgage loan or vehicle loan, in a Chapter 7 bankruptcy.
You can qualify for Chapter 7 if your household income is below a certain amount. Something known as a means test determines whether or not you qualify for a Chapter 7 bankruptcy. The means test is based on the number of people in your household, and is determined using your household income for the 6 months prior to filing bankruptcy.
Collection calls can be harassing. Some bill collectors can be aggressive and threatening. After you file a Chapter 7, these calls will stop. Something called an automatic stay goes into effect immediately after you file for bankruptcy protection. An automatic stay prohibits a creditor from contacting you.
When you hire an attorney to file for Chapter 7 bankruptcy, your attorney will look at your assets and try to protect them using federal or state bankruptcy exemptions. There is a misconception that people filing for bankruptcy will lose their assets. Your most important assets, including your house, car, etc. usually can be protected.
Author's Bio: The author is a blogger. This article is about Chapter 7 bankruptcy.
