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Pros and Cons of Chapter 7 Bankruptcy

Chapter 7 Bankruptcy
Chapter 7 Bankruptcy
Bankruptcy connotes a negative implication to people. Likewise, bankruptcy can be beneficial to regain control over your financial standing.

What is Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy is considered  as “straight bankruptcy.” Unlike Chapter 13 bankruptcy where it involves a repayment plan, Chapter 7 Bankruptcy can eliminate most of your unsecured and secured debts by surrendering all of your assets. The Bankruptcy Trustee gathers all of your support and sells them to pay off holders of claims – your creditors.

Pros of Chapter 7 Bankruptcy

Automatic Stay  In this type of bankruptcy petition, the court issues an “automatic stay” that takes effect immediately. The automatic stay means an immediate halt to all kinds of debt collection, including calls, letters, lawsuits, repossessions, evictions, and foreclosures. Discharged of Debts As mentioned above, Chapter 7 Bankruptcy can discharge your debts both secured and unsecured. Suppose your petition for this type of bankruptcy is successful. In that case,  Chapter 7  Bankruptcy will ban your creditors from collecting debt claims to you.  Retain your Assets Once your Chapter 7 Bankruptcy petition becomes successful, your assets and other investments retain. It does not only wipe off your debts but also keeps your assets and investments safe.  Protect your Future Wages One of the perks of filing for Chapter 7 Bankruptcy is the luxury of giving you a fresh start. Creditors cannot take hold of your future wages.  Whatever future wages or income you may gain, it will be all by yourself. Quick Turnover Unlike Chapter 13, Bankruptcy, where the legal process can take months and years to be over finally, Chapter 7 Bankruptcy legal process is quicker to complete.

Cons of Chapter 7 Bankruptcy

Liquidation You may need to turn over certain types of properties and assets to the bankruptcy court to pay off your creditors. Likewise, there are specific properties and assets also that are exempted from liquidation. Hiring a skilled attorney will help you identify which investments and acquisitions are included in the exemption. Priority Debts cannot be Discharged Priority debts such as student loans, government taxes and penalties, child support, and alimony are not included in Chapter 7 Bankruptcy for clearing. You still need to pay these types of debts under any circumstances. Affects your Credit Score Filing for Chapter 7 Bankruptcy will significantly affect your credit score. It will stay on your record for a maximum of 10 years. But, you can still rebuild your credit score right after filing a Chapter 7 Bankruptcy. Limits you to file another Bankruptcy Petition Chapter 7 Bankruptcy does not allow you to file another bankruptcy in the future within eight years from the approval of your petition. That is why deciding to file for Chapter 7 Bankruptcy is crucial. It would help if you had an expert’s opinion on whether to file it now or make it a later option.

Is Chapter 7 Bankruptcy Right for You?

Chapter 7 Bankruptcy makes sense when:
  • You don’t have 
  • Your total debts are 50% more than your annual income.
  • Your unsecured debts that are taking a toll on your life will be discharged. It includes medical bills, credit cards, and other personal loans.
  • If your debts take three years or more to pay them off, given you have already done all extreme measures to settle your debts.
Filing for Chapter 7 Bankruptcy is a critical decision to make. It can be stressful for you to figure out if it’s the right option for you. Right here in Ogden, UT, Godfrey Law has a team of legal professionals who are compassionate to help you make the right decision for you. Call Godfrey Law now at 801-621-7445 or book your appointment through the website.

Chapter 7 Bankruptcy

Chapter 7 Bankruptcy Expert in Ogden, Utah

Godfrey Law can help you get a fresh start

Bankruptcy is not as bad as you think. The truth is it can give you a new beginning and get you on the road to building up your credit and increasing your credit score.

People always get worried about lawyer fees when asking for help. Many would rather work out the process themselves, which results in more complex situations that would cost more in the end.

The prevailing mindset is, I am already bankrupt, so how can I afford to pay for an attorney?

At Godfrey Law, we keep our clients informed about the fees that they can expect to pay.

Being transparent and straightforward is what we pride ourselves in.

Benefits of Chapter 7

Chapter 7 bankruptcy is a tool where the trustee collects all of your assets and sells those which are not exempt.

Many Utah residents choose Chapter 7 because they want to eliminate their heavy debt without paying for any of it. Here are the benefits of a Chapter 7 filing:

  • Gives you the ability to discharge most debt which can lower your stress levels
  • May give you the chance to get rid of some tax debt
  • Prevents creditors from filing lawsuits against you
  • Once discharged, the only debts remaining will be for secured assets
  • Protection against creditor’s collection activities and wage garnishment. No more harassing for money that you can’t pay
  • You may keep your home, cars and household goods
  • Chance to rebuild credit score
  • No minimum amount of debt required for filing
  • Your case is done and completely discharged in 3 to 6 months

In the majority of cases, Chapter 7 can eliminate huge credit card debt and other unsecured bills.

There are debts that cannot be discharged in Chapter 7 like child support, alimony, specific taxes, fraudulent debts, student loans and other items.

You need to take note that when you file a Chapter 7, you can’t “unfile” it.

When you receive your discharge, it means that your unsecured debts are eliminated.

Experience with Chapter 7

We have been handling Chapter 7 bankruptcies for Utah residents since 1984. That’s a ton of experience in helping families get through every scenario you can think of.

We would love to share information in the bankruptcy process that may help you make major decisions.

If you are not familiar with bankruptcy proceedings, you may miss critical steps that can have an impact on exemptions. You may also miss out on categories of debts that you can include in debt elimination.

Mistakes can be costly, your case can take longer, or you may not have certain debts discharged.

It’s always best to have an experienced attorney by your side to guide you every step of the way.

Godfrey Law Advantage

  • Free consultation
  • Best rates in Utah
  • Trusted
  • Reliable
  • Accurate advice
  • Full assistance
  • Free evaluation
  • Over 3 decades of experience
  • Strict with confidentiality

We have an advanced technology-driven process management system in place that leads to the best results at lower costs.

Let’s talk! Allow us to help you get a fresh start!

Give us a call, or send us a message on our website.