Chapter 7 bankruptcy offers consumers a way to free themselves from what otherwise would be insurmountable debt. However, despite the financial solutions it offers, the process often is misunderstood. It’s critical to understand what you're entitled to when you file for bankruptcy so you can realize its full benefits.

3 Advantages of Chapter 7 Bankruptcy

1. Debt Elimination

When you file for Chapter 7 bankruptcy, most of your unsecured debts will be eliminated by the courts. For people whose debts are due to unmanageable credit card balances, overdue medical or utility bills, or rent owed to a landlord, bankruptcy will provide a fresh financial start. However, not all unsecured debts will be wiped out under a Chapter 7 bankruptcy filing — student loan balances and missed child support obligations usually are not dischargeable.

2. Temporary Stay on Foreclosure

When you file for bankruptcy, the courts automatically will issue a temporary stay on foreclosure action against you. This will give you time to work with your bankruptcy attorney to explore your options. For instance, you can determine whether you should retain ownership of your house or liquidate it to relieve or repay debt.

3. Credit Counseling

As part of the Chapter 7 bankruptcy process, you must complete an approved credit counseling course. It will provide instructions to help you understand your finances better, giving you the tools and resources you need to make better decisions with your money and credit as you move forward. You will gain a money management plan that is not only realistic but empowering.

Bankruptcy attorney Allyson Pearce of Pearce Law Firm has been serving the Foley, AL, area for more than 15 years and will provide the expertise you need to resolve your money problems. Call (251) 368-2992 or contact the firm via its website to schedule a consultation with a lawyer about Chapter 13 or Chapter 7 bankruptcy. Connect with them on Facebook for more tips and news from the law firm.