Almost everyone has heard the term “bankruptcy,” often in a negative context. However, bankruptcy can be extremely beneficial for many households, as it can provide financial relief so that you can regain control of your situation. Bankruptcy is a complicated legal process and there are some possible drawbacks to filing. If you are having problems paying your debts, you should always speak to an experienced bankruptcy attorney who can help you weigh the pros and cons to determine whether bankruptcy is right for you. The following is a brief overview of the basic benefits and drawbacks of Chapter 7 bankruptcy for many people.
Benefits of Chapter 7
The main reason that people file for Chapter 7 bankruptcy is for debt relief. Chapter 7 can relieve the pressure of your debts in different ways, including:
● Automatic stay - The moment you file your bankruptcy petition with the court, an order called the “automatic stay” goes into effect. As soon as this happens, all collections efforts for debts must stop, including calls, letters, garnishments, repossession, lawsuits, evictions, and foreclosures. This gives you immediate relief from the pressure of constant creditor and collections calls.
● Discharge of debts - If your bankruptcy case is successful, it will end with a discharge of many types of debts, including credit cards, some tax debt, past due rent and utilities, medical bills, personal loans, among others. This means you will not be obligated to make payments on these debts ever again.
Potential Drawbacks of Chapter 7
Bankruptcy does have certain components that can be seen as negative by filers. The following are some of the most common concerns about Chapter 7:
● Property seizure - The bankruptcy court may require you to turn over certain property and assets in order to repay as much money nas possible toward your debtors. There are exemptions under the law that help you protect most of your property. However, a skilled attorney can help you protect as much property as possible.
● Not all debts are discharged - While many types of debts are dischargeable, other major debts such as your mortgage, car loans, student loans, and child support will not be discharged. However, discharging your other debts will free up money so that you can keep up with your remaining debts.
Call an Arlington Bankruptcy Attorney to Discuss Whether Chapter 7 is Right for You
If you would like to learn more about whether Chapter 7 bankruptcy can help resolve some of your financial issues, call 817.381.9292 to speak to an experienced Texas bankruptcy lawyer at the Law Office of Marilyn D. Garner today.