Chapter 7
Advantages
- No minimum or maximum debt is required.
- Any unpaid balances are discharged after you assets have been liquidated
- You can keep any wages you earn or property, except for inheritances, after the bankruptcy filing date.
- Most cases are completed in 4-6 months.
- Creditors can no longer contact you once a petition is filed.
- Foreclosure can be stopped while going through the process to give the debtor time to get their finances in order.
- Prior to filing the debtor must speak with an approved credit counselor. This action should help to get finances in order to avoid future financial problems.
Disadvantages
- Your non-exempt property is sold.
- Not all debts are discharged.
- Co-signers can still be held liable for the debts.
- Stopping a Chapter 7 is difficult.
- Will damage your credit rating and bankruptcy is public record. Chapter 7 will be reported for 10 years on your credit report.
- Any liens on a property cannot be included in the bankruptcy.
- Difficult to qualify for.
- Filer is responsible for all costs associated with bankruptcy.
- Certain professions and employers will not hire an employee who has filed for bankruptcy.
Debts that are NOT discharged:
- Child support
- Alimony
- Student loans
- Income taxes (that are less than 3 years past due)
- DUI judgments
- Debts incurred by fraudulent means.
