There are many advantages to filing Chapter 7 bankruptcy which is why so many people these days seek this as an option. In most circumstances for those filing Chapter 7 bankruptcy, the good things definitely outweigh the negatives. Before deciding to file Chapter 7 the individual should sit down and speak with a bankruptcy attorney to discuss their personal financial situation to see if this is a viable option. Most people discover that some of the things that they thought were a negative are really not that big of a deal. For instance, people believe that their credit scores will be destroyed after filing bankruptcy. The truth is, their credit scores are most likely already in terrible condition due to defaults and numerous late pays coupled with high credit ratios. After filing Chapter 7 the individual’s credit scores will not be that much worse. These same individual’s are also under the impression that it will be next to impossible to ever get credit again. This is also false. Shortly after their bankruptcy discharge offers for credit will start trickling in, usually within a few months. With responsible financial management the individual will be able to qualify to buy a car or home within a few years.
So what is the main reason that people decide to file Chapter 7 bankruptcy? To put it simply, to become debt free. Chapter 7 bankruptcy is king when it comes to wiping out unsecured debts such as credit cards, store charge cards, old utility bills, medical bills, personal loans, etc. It was recently reported that the average American has about $16,000 in credit card debt alone while their annual income averages about $35,000. Looking at these figures it is almost impossible to pay off this debt and get ahead. This is why so many people consider Chapter 7 bankruptcy. Chapter 7 will also put a stop to creditor harassment, lawsuits, judgments, and wage garnishments. A Chapter 7 bankruptcy can even temporarily stop a foreclosure allowing the debtor time to figure out their financial circumstances and decide if they want to keep their home or give it up in the bankruptcy to release them of any financial liability.
Chapter 7 bankruptcy has many advantages, but the bottom line is people typically seek this chapter of bankruptcy for the reasons of getting out from under crushing debt and getting on the path to becoming debt free.