There are definitely some major consequences of filing for Chapter 7 bankruptcy, but there are also a lot of benefits, and one of the main benefits you may discover is that filing for Chapter 7 makes it so much easier to pay your bills. You may not notice this until you file your documents with the bankruptcy court, but you will likely see shortly after this how much easier it is for you to pay your bills and live your life. Here are three reasons filing for Chapter 7 has this effect for most people.
You receive a discharge on qualifying debts
When you receive a discharge of qualifying debts, it means that you no longer owe these bills. Suppose you owe $20,000 on credit cards when you file for bankruptcy. If the court discharges these debts, you will owe nothing for them. Imagine how much money you could save each month by not being required to pay the minimum balances on these cards. This might help you save $1,000 a month, or more, and the money you save by not having to pay these is cash that you will now have in your budget to spend. A discharge of debts often frees up a lot of cash for a person, and the person can use this cash to pay off debts that did not get discharged.
You will learn about budgeting
Paying the rest of your bills also gets easier after filing for bankruptcy due to the wealth of education you are exposed to during it. Filing for Chapter 7 requires taking two credit counseling courses, and these courses will teach you so many things about budgeting your money. If you put some of the principles you learn into practice, you may have a much easier time paying your bills, saving money, and spending it more effectively.
Filing for bankruptcy ends creditor harassment
The other thing you should understand is that your life will be simpler after you file for Chapter 7 because you will receive an automatic stay from the court. While an automatic stay does not directly make paying your bills easier, it will make your life less stressful, simply because you will no longer receive calls or letters from creditors who are demanding payment for the bills you owe.
If you have not talked to a bankruptcy attorney about your personal situation, you should schedule a visit. This visit will help you learn more about the pros and cons of using Chapter 7 for debt-relief purposes.