Chapter 7 represents the type of bankruptcy that most individuals choose. If your unmanageable debt has put you in the position of needing legal debt relief, filing for Chapter 7 may well be your most favorable option.
You can receive numerous benefits from a Chapter 7 bankruptcy. Here are the top six surprising facts about Chapter 7 that you need to know.
- You will not lose everything
Chapter 7 requirements include a number of exemptions that in all likelihood will allow you to keep most of what you own. In addition, you can keep all the income you receive from salary or wages after you file.
- You will receive almost immediate relief
Chapter 7 takes only three to six months from the time you file until the time the bankruptcy court discharges your debts.
- You will receive virtually unlimited debt relief
Chapter 7 represents a discharge proceeding. This means that the court will discharge virtually all your consumer-related debts. Consequently, you will never have to pay them.
- Your creditors cannot hound you for debt repayment
Immediately upon filing Chapter 7, the court issues an automatic stay that oftentimes lasts for the duration of your bankruptcy. This stay prevents your creditors from contacting you in person or by phone, text, email, etc. to demand payment of your debts.
- You can reestablish your credit
Although you will lose all your existing credit cards when you file for Chapter 7, you likely will be able to reestablish your credit within one to three years after your bankruptcy period ends. Unfortunately, your first post-bankruptcy credit cards likely will carry a higher interest rate than your current ones, but you can renegotiate this rate with the respective credit card companies once you establish a six-month on-time payment record.
- If necessary, you can refile for Chapter 7
If you once again find yourself in financial difficulties after your first bankruptcy, you can refile for Chapter 7 in six years.