Advantages of Chapter 7

There are many different forms or chapters of bankruptcy to file as a form of personal debt relief. One such type is Chapter 7 Bankruptcy. Chapter 7 Bankruptcy is commonly known as a liquidation bankruptcy. This allows for the sale or liquidation of your personal assets to repay your debts. Some of your assets may be protected, but not all. Not everyone qualifies or is eligible for Chapter 7 bankruptcy. A chapter 7 attorney will be able to determine if Chapter 7 bankruptcy is best suited for your particular situation. The stigma associated with filing for bankruptcy is not longer present in today’s society. So what are the advantages of filing Chapter 7 Bankruptcy?

Chapter 7 bankruptcy could work to your advantage on several levels. When you file for chapter 7 bankruptcy you get an automatic stay so all collections will and must immediately stop. To an individual under constant harassment from creditors this is a welcome relief. It may no longer be an unwelcome chore to check the mail or your voice messages. This can stop the seizure of your personal property like your home, car or bank account.

Chapter 7 bankruptcy does not involve the filing of a debt repayment plan like other chapters of bankruptcy require. Your debts are paid (and subsequently discharged) from the proceeds of the sale of your personal assets that were not protected under the Chapter 7 bankruptcy laws. There is no monthly payment (in other cases repayment can take a long a five years) to be made for your debts. A trustee is assigned to the court to oversee the liquidation of the non-exempt assets. Many people do not lose any of their personal property during the Chapter 7 bankruptcy process. Being able to keep what assets you have is always a good thing. Once you are done you are done. Chapter 7 Bankruptcy will not erase certain debts like child support, alimony, student loans or taxes; you must still pay or repay them. Chapter 7 bankruptcy is seen as giving the debtor a fresh start. Everyone at some point in their lives could you a fresh start on their credit.

Miami like other large metropolitan areas in Florida is experiencing an increase in the number of Chapter 7 bankruptcy filings. There were 2007 new Chapter 7 bankruptcies filed in January 2011 for the Miami area. The Miami area has a plethora of Chapter 7 attorneys and chapter 7 law firms. Caution and extreme care should be exercised when selecting a chapter 7 lawyer because bankruptcy is legally binding and once you begin the bankruptcy process you must follow through until all of your debt is discharged. The chapter 7 bankruptcy rules are prone to constant change and a chapter 7 bankruptcy attorney could prove to be your best resource although costs vary from lawyer to lawyer and firm to firm.

Sources

Liquidation Under the Bankruptcy Code

U.S. Bankruptcy Court Southern District of Florida