subject: The Benefits Of Filing For Chapter 7 Bankruptcy [print this page] In some people's eyes, filing for Chapter 7 bankruptcy is never a good idea. One of the reasons they have this opinion is because they think it messes up people's credit history. Therefore, they believe people should do everything in their power to avoid filing. However, this is not always a wise idea. In actuality, there are several reasons why filing for Chapter 7 bankruptcy is beneficial in many cases. This is especially true for those who are in severe debt and owe a large amount of money that they know they'll never be able to pay back.
One of the reasons why taking this route can actually be beneficial is because the moment that someone files, an automatic stay goes into effect. What this does is stops creditors from trying to collect wages from people. They can't even legally garnish any of their checks.
Now, this isn't just important because it gives those who are financially struggling a break from their bills. However, it also helps them to be able to afford other necessities. When a creditor comes in to garnish someone's check and they are already struggling, it makes it harder for them to afford necessities like food.
For instance, if somebody gets $1,500 a month and creditors garnish their checks and only leave them with $500, this means they would only have $500 to pay the rest of their bills, pay their rent, feed their family and purchase other necessary items. This just isn't possible in today's society. That amount of money is not nearly enough to take care of a family or even a single person for that matter. Therefore, the automatic stay gives people an instant sense of financial relief, even before they finish the entire process.
Lastly, the main benefit that comes along with filing for Chapter 7 bankruptcy is the fact that it allows people to cancel out most or even all of their debts. So, their slate is basically wiped clean and they no longer have to worry about struggling to come up with the money. What this does is allows people to get back on their feet and makes it easier for them to pay for necessities. It also gives them an opportunity to save some money, which will help to propel them into a better financial situation.
Although filing for Chapter 7 bankruptcy is not seen as a good idea by many people, there are actually many benefits that come along with it. Not only does it provide temporary financial relief, but it can also help cancel some debts altogether.
