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5 Chapter 7 Bankruptcy Benefits You May Not Know About

If you are like most people, you know that Chapter 7 bankruptcy can give you major debt relief. What you may not realize, however, is that Chapter 7 offers you quite a few additional benefits as well. Here are five facts to consider.

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1. Immediate Relief

As any Rockville bankruptcy lawyer can tell you, Chapter 7 represents the quickest form of bankruptcy. You can expect only three to four months to elapse from the time you file until the time of your ultimate discharge.

2. Numerous Exemptions

Most people mistakenly think that they will lose everything they own if they file bankruptcy. Such is not the case. Not only does Chapter 7 include many exemptions that let you keep much of your property, but you can also keep your wages or salary.

3. Virtually Unlimited Debt Relief

Chapter 7 sets no cap on the amount of debt relief the bankruptcy court can grant you. You can, therefore, expect the discharge of virtually all of your consumer debts, including your credit card debts.

4. Automatic Stay Period

One of the biggest advantages of Chapter 7 in terms of relieving your stress is that once you file, the court issues an automatic stay. This means that all of your creditors must cease and desist calling you on the phone or sending you texts, emails, and/or snail mail demanding that you pay them.

5. Relatively Quick Post-bankruptcy Credit Reestablishment

While it is true that filing bankruptcy will result in the loss of all of your credit cards, in all likelihood this won’t affect you too much since most of your credit card companies have probably already canceled their respective cards. Once your bankruptcy period ends, it should take you no longer than a year or two to reestablish your credit. You can expect to pay higher fees and interest rates for your initial post-bankruptcy credit cards, but if you use them for small purchases only, paying the full balances each month, you can renegotiate their terms after as few as six months. You can also apply for new credit at that point, having already proved your financial responsibility and excellent payment record.

Is filing for a bankruptcy right for you?

Millions of Americans face financial problems. Bankruptcy is an option for you to consider. Knowing more about a bankruptcy will help you to determine if it’s what’s best for you.

What You Keep

With the help of a chapter 13 lawyer Orlando FL residents learn about what they can keep. You can choose to include your home into the bankruptcy or keep it. As for your other belongings, all of the “luxury” items will typically be sold as a way to settle your debts. This includes RVs, boats, and other items.

Your Credit

Your credit score will take a substantial hit when you decide to file for a bankruptcy. It may be several years before you’re able to qualify for a credit card or store account. In most instances, a bankruptcy will remain on your credit score for seven years. However, there are ways to overcome this faster if you’re able to prove that you have learned from your mistakes. Much of it comes down to how much debt you have and how much the creditors have to forgive.

The Costs

The cost of filing for a bankruptcy is going to vary. This is why you will want to sit down with a bankruptcy lawyer. You can learn about the costs to file as well as how long the process will take. The costs are dependent on how much debt you have as well as how many creditors are being included.

You have options when you’re in financial distress. Whether it’s because you’re going through a divorce or there is another reason, you may need to look at a bankruptcy. By sitting down with a lawyer, you can learn whether it’s the right move for you to make.