The Benefits of Filing Chapter 7 Bankruptcy
You have probably heard plenty of negative things about bankruptcy. Depending on where you have gotten your information, you may have heard that it will ruin your credit forever, that you may not be able to find a good job afterward, or even that your bankruptcy will show up on a background check. While some of these claims are loosely based on facts, the truth is that when it comes to bankruptcy, people tend to overemphasize the negative. In reality, the process of bankruptcy has some truly positive aspects. Below we will discuss some of the ways that filing a Chapter 7 bankruptcy can be a positive experience.
Reduce or Eliminate Unsecured Debt
In Chapter 7 bankruptcy, your unsecured debts will be eliminated. This type of bankruptcy is often called liquidation because it allows you to discharge your outstanding debts without paying off your creditors. Every step must be approved by the bankruptcy court, but it still takes much less time than a reorganization plan that occurs during a Chapter 13 bankruptcy.
You May be Able to Keep Your Home
Some folks will still lose their home in a Chapter 7 bankruptcy due to foreclosure. However, in some cases, you may be able to keep your home by reaffirming your mortgage and continuing the monthly payments. If you are not able to keep making the mortgage payments, the benefit of having a clean slate to start over may outweigh the burden of losing your home. Bankruptcy will also give you a new start so that you can begin building back your credit, which will allow you to buy another home in the future.
Your Credit Will Not be Ruined Forever
No matter which bankruptcy you file, your credit score will be affected. The good news is, though, that it will not damage it forever. If you start taking steps to rebuild your credit as soon as your bankruptcy is final, you will be surprised at how quickly your credit bounces back. Many creditors view bankruptcy much more favorably than a huge pile of debt.
Reorganize Your Finances
Bankruptcy will give you a chance to reorder your budget permanently. You will not have to subject yourself to a repayment plan, but you will need to give the courts detailed information about your expenses and income. This gives you the perfect opportunity to review your budget and determine where your money will go each month so you can start rebuilding your credit and ensure that your finances are healthy in the future.
Where to Start on Filing Chapter 7 Bankruptcy
The honest truth is that bankruptcy does not have to result in financial ruin. It can actually be a powerful tool to reduce or eliminate your unsecured debts and give you back the financial security that everyone wants. The attorneys at Cornwell Law Firm can review your situation and help you determine if Chapter 7 bankruptcy is right for you or if another option would be better. Contact us today to schedule a consultation and let us help you get back on your feet financially.