Unlike chapter 13 bankruptcy, Chapter 7 doesn’t require the filing of repayment. Instead, the bankruptcy trustee should gather and sell your non-exempt assets and use the proceeds to repay your debtors according to the provisions of the United States bankruptcy code. Part of your home or any other piece of property might be subject to alien and probably mortgages that pledge the house to another creditor.
The Bankruptcy Code allows you (the debtor) to keep specific ‘exempt’ property, but the bankruptcy trustee will liquidate the remaining assets. Therefore, if you intend to file for Chapter 7 bankruptcy, the chances are that you will lose the property. However, working with an experienced Orlando bankruptcy lawyer, you can realize the following benefits.
Complete your bankruptcy case within a short time
While bankruptcy will remain in your record for many years, it will take a short time to complete a Chapter 7 bankruptcy. Right from filing the case to debt relief, it will take three to six months. If you ignore this bankruptcy option when it was the most viable solution to your financial challenges, defaults, missed debt repayments, and a lawsuit will negatively impact your overall credit score. Besides, it will be very complicated to explain your bad credit score to a future lender.
You may get exemptions too
Most state exemptions allow people seeking bankruptcy to keep some of their assets. That means your property may be protected. You will also get a chance to keep your wages or salary you earn and the assets you acquire after filing for Chapter 7 Bankruptcy.
You may also be eligible for Chapter 13 bankruptcy
Though the law allows you to file bankruptcy under Chapter 7 every 6 years, you may qualify to file under Chapter 13 if you are still facing financial challenges before you’re entitled to bankruptcy under Chapter 7. Remember, all your bankruptcy records will appear on your credit history.
- You may be eligible for new lines of credit within 1-3 years after filing for bankruptcy. However, the interest rate might be slightly higher.
- Some lenders specialize in offering credit services to people with bad credit score. Though this is an unfair characterization of someone who took a major step to solve their financial challenges, you can still get credit services from such lenders.
- Chapter 7 bankruptcy will alleviate most of your financial obligations. However, only a court order can suspend child support and alimony obligations.
- It will also prevent your creditors from an aggressive collection.
- If you acquired a Chapter 13 debt discharge in good faith after repaying 70 % of all your unsecured debts, the 6-year bar might not apply.
Lastly, filing for bankruptcy under Chapter 7 doesn’t require you to have financial obligations of any amount for you to file for relief. Even if your bankruptcy case is converted to Chapter 13, it can better your financial situation. This is because you can obtain more favorable terms to repay your debts.