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Chapter 7 bankruptcy provides an effective solution to the pressures of out-of-control debt. Unfortunately, bankruptcy is an often-misunderstood process that is unfairly and inaccurately stigmatized, forcing some to labor under the mistaken impression that filing bankruptcy is a bad thing. Below is a brief list of reasons why filing for Chapter 7 bankruptcy is actually a positive step that allows you to reclaim control over your financial situation.

Start Fresh From a Clean Slate

Unlike Chapter 13 bankruptcy, Chapter 7 is a debt elimination program. When you file, all of your qualified unsecured debts are wiped away by the bankruptcy courts. This leaves you with a clean slate from which to start afresh. With no debt obligations weighing them down, most filers have the opportunity to rebuild their finances and make careful, informed decisions about how to manage their money moving forward.

You Can Still Get Loans, Secure Credit, & Rent a Home

There is a prevalent myth that a Chapter 7 bankruptcy filing will prevent you from getting approved for loans, new lines of credit, and rental homes. This is simply untrue. Yes, your bankruptcy will appear on your credit report for 10 years, and, yes, your credit score will take an initial hit. But that doesn't mean you will automatically be disqualified from acquiring loans, credit, or housing. You may have to discuss your situation with potential lenders, and, in the case of rental housing, you might have to put down an extra security deposit. However, you will most likely still be able to obtain and benefit from these services.

Learn Better Financial Skills

Chapter 7 bankruptcyMoney matters don't come naturally to most people; they often require a bit of education and practice to get right. As part of a Chapter 7 discharge, you will need to satisfactorily complete an approved credit counseling course. This course will give you the chance to see where you went wrong, learn some better ways of handling your money, and improve practical skills like budgeting, staying on top of payments, and future financial planning.

 

Chapter 7 bankruptcy is not a bad thing; in fact, for most people, it's quite the contrary. Contact Greg Dunn, Bankruptcy Attorney, to start exploring Chapter 7 for yourself. Based in Honolulu, Hawaii, Attorney Dunn has been serving area clients since 1988. Call (808) 524-4529, visit him online, or message him on Facebook to set up a consultation with a bankruptcy attorney.

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