Advantages of a Chapter 7 Bankruptcy
By Douglas Jacobs, California Bankruptcy Attorney on Aug 7, 2007 in General Bankruptcy Information
As noted in “Should I file a Chapter 7 or a Chapter 13 Bankruptcy?,” there are significant differences between these two common types of bankruptcies for individuals. A Chapter 7 – a straight bankruptcy – discharges all of your dischargeable debts, in one swoop.
It is a fairly quick, one-shot, process and in six months (usually) all of your credit cards, medical bills, and the like are gone. You get your “fresh start.”
But there’s a catch. All of your property when you file a Chapter 7 becomes property of the bankruptcy estate. That means that sometimes the trustee will take some of it to sell to raise money to pay your creditors. They can even force the sale of your house unless it has little unsecured value or is protected by a homestead.
So, a Chapter 7 isn’t for everyone. Your specific circumstances will dictate whether or not it is the best approach for you. Speak to a competent bankruptcy attorney in your area.
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