You feel overwhelmed by your bills each month. You can’t keep up with paying off your medical debt from an unexpected surgery. You may have lost your job in the recent economic downturn. You may be struggling paying of thousands in credit card debt. The stress is becoming too much, and you wonder if you should seriously consider bankruptcy.
When considering bankruptcy, you need to understand its advantages. For a Chapter 7 bankruptcy, the most common in the United States, those include the following:
Chapter 7 bankruptcy is the most common bankruptcy individuals in the United States seek. Part of the reason why is because of the advantages it offers, including the following:
- You can discharge thousands in debt – everything from medical debt to consumer debt.
- You can have your bankruptcy resolved quickly. Usually, Chapter 7 bankruptcies can be completed in three to six months.
- You will get an automatic stay from creditors. That means creditors must stop harassing you with phone calls immediately after you file bankruptcy.
- You may be able to protect some of your property through California’s bankruptcy protections. You can keep up to $75,000 in a homestead exemption if you are single, $100,000 if you have a family and don’t have a second home and $175,000 if you are 65 and older.
- You can suspend child support payments or alimony payments.
The main disadvantages to filing a Chapter 7 bankruptcy is that you have to meet income limits to qualify and a Chapter 7 bankruptcy will stay on your credit report for 10 years.
However, you can get a fresh start through Chapter 7 bankruptcy and start rebuilding your credit and financial future. It often is the best option for those swamped with debt.