The People’s Lawyer

3 major benefits of Chapter 7 bankruptcy

On Behalf of | Mar 27, 2024 | Bankruptcy

Debt can be suffocating, with bills piling up and relentless creditors won’t stop calling. Despite all this, you may not have entertained the thought of bankruptcy. Misconceptions surrounding bankruptcy do tend to overshadow its potential benefits.

Chapter 7 bankruptcy involves liquidating the debtor’s assets to repay creditors. Although it may appear that you might lose everything, the reality is far different. Many who apply for Chapter 7 find that they can retain most of their assets.

Seeing what Chapter 7 bankruptcy can offer may help you determine your next steps.

Relief from creditors and most debts

As soon as your bankruptcy case is filed, an automatic stay comes into force. This puts a stop to all collection actions. Creditors will no longer be able to call you, write and send collection letters or initiate a lawsuit against you. It may also pause foreclosure, vehicle repossession or eviction actions, giving you much-needed breathing room.

Additionally, Chapter 7 bankruptcy discharges most unsecured debts, freeing you from having to pay them. Credit card debts, medical bills, and personal loans are some of the debts that Chapter 7 typically helps eliminate.

Future income and certain assets remain yours

Properties you acquire after filing, such as inheritances, will not be part of the bankruptcy estate and are yours to keep. Federal law also keeps retirement accounts out of reach from bankruptcy proceedings.

In West Virginia, you can protect certain assets from liquidation, such as jewelry, a vehicle, tools essential to your job and other personal belongings, up to a specific value. Full exemptions may also be possible for monetary assets such as alimony, lost earning payments, disability benefits and unemployment compensation.

Quick path to a fresh start

Chapter 7 bankruptcy may discharge your debts within just a few months. This can provide quick relief from the burden of unresolved debts, enabling you to focus on your future.

Starting a new chapter with bankruptcy

The decision to file can be difficult. Obtaining insights and counsel from an experienced attorney may help you determine whether this is the best approach for you.

Bankruptcy is not the end of the road but rather a new beginning. It presents an opportunity to learn from the past and confidently move forward.