Chapter 7 bankruptcy is a debt discharge bankruptcy option that many struggling consumers may prefer. As long as the filing party does not exceed the income limit to qualify for Chapter 7 bankruptcy, they may be able to retain nonexempt property and liquidate other property to repay creditors and enjoy debt relief.
Under a Chapter 7 bankruptcy, the bankruptcy trustee will sell nonexempt property to repay creditors, leaving the filing party with property that is considered exempt from the process according to Chapter 7 bankruptcy exemptions. There are a variety of advantages to Chapter 7 bankruptcy and reasons to file for Chapter 7 bankruptcy that filing parties will want to consider in addition to the fact that it allows the filing party to liquidate non-exempt assets to repay creditors.
One main advantage of a Chapter 7 bankruptcy is that it allows the filing party to receive a fresh financial start and debt discharge of allowable types of debt at the end of the process. Overwhelming debt carries with it many worries and Chapter 7 bankruptcy can help with that. In addition to non-exempt property, the filing party will be permitted to keep future income under a Chapter 7 bankruptcy filing. To qualify for Chapter 7 bankruptcy, another primary advantage is that there is no limit on the amount of debt the filing party can have to qualify for Chapter 7 bankruptcy and the filing party will not have to follow a repayment plan like in a Chapter 13 bankruptcy filing.
Another benefit, which is true of all types of bankruptcy, is that after the filing party has filed for bankruptcy protection, an automatic stay goes into effect to protect the filing party from further creditor collection actions during the process. The process also typically occurs without dragging out in a matter of months so that the filing party can enjoy debt relief sooner rather than later. All of these advantages makes personal bankruptcy options worth checking out when a struggling consumer finds themselves being crushed by overwhelming debt.
