A Chapter 7 Bankruptcy is designed to help you get out from under debt and get a fresh start. It is there to help people who have fallen on hard times, avoid becoming slaves to their debt so that they can get ahead again in their life.

 

There are many misunderstanding about filing for Chapter 7 Bankruptcy.

 

    1. You do not have to lose your house or your car.  Many people think that if they file a Chapter 7, they will have to give up their house or car.  This is not true. If you are current on your payments with your house or car, you can keep them in a Chapter 7.  If you are behind on payments, but still want to keep a house or car, you should consider a Chapter 13 bankruptcy instead.

 

    2. You do not have to be unemployed. While being unemployed often means you can qualify for a Chapter 7, it is not a requirement.  Many of my clients are employed in full-time jobs.  But those full-time jobs are simply not enough to make ends meet.  

 

    3. Your friends and neighbors are not likely to find out.  While it is true that bankruptcy filings are public, as are almost all court proceedings, most people won't find out about your bankruptcy filing.  To get bankruptcy information, you either have to go to the bankruptcy court and ask for information, or you have to have a login and password for the Court's filing system. When you file a bankruptcy, only your creditors are informed about your filing so they stop trying to collect from you. Other than that most people have better things to do than to spend their time searching court records just to see if their friends or neighbors have filed bankruptcy.  

 

  4. You will be able to buy cars and a house after bankruptcy. Many people think if they file bankruptcy they will never be able to own a home and never be able to buy a car at a good interest rate. That isn't true.  Many programs allow for the purchase of a home 2-3 years after a Chapter 7 bankruptcy.  And many auto lenders have second chance programs. Many people are able to get reasonable auto loan interest rates as soon as a year after filing. 

 

    5. Good people file bankruptcy.  Too many people I talk to think that if they file bankruptcy it means they are a bad person. The people I have worked with are good, hard-working people who have simply fallen on hard times.  Usually, the loss of a job, divorce, or a serious medical situation is what leads people to file bankruptcy.  These are events beyond their control. Numerous famous people, including some of our founding fathers and some well-known business executives, have had to file bankruptcy at one time or another in their lives. Chapter 7 bankruptcy is a tool to help good people, not a scarlet letter that will brand you for life.  

WHAT YOU NEED TO KNOW ABOUT CHAPTER 7

Here are some of the things you can accomplish through a Chapter 7 Bankruptcy:

 

 

1. Stop Garnishments, lawsuits, and most other judicial proceedings.  As soon as you file a Chapter 7 bankruptcy, your creditors have to stop their collection efforts against you.  At Crosby & Fox, we make sure those creditors who are garnishing your wages, trying to foreclose on your home, or who are suing you, know right away that you have filed and that they have to stop. A bankruptcy can give you the breathing space you need.

 

 

2. Eliminate Unsecured Debt.  A Chapter 7 will help you get rid of those credit card bills, medical bills, pay-day loans, and other unsecured debt.  Sometimes, in certain circumstances, it can even eliminate some of your tax debt. Every situation is different, so consultation with an attorney is key.

 

3. Stop Collection Calls At Home and Work. At Crosby & Fox, we understand just how ruthless collectors can be. Phone calls in the morning, noon and night, at home, at work and sometimes even to your friends. Once you file a Chapter 7, your creditors have to stop the calls.  And we will make sure they do. If they do not stop, we will take the steps to get court orders forcing them to stop and in some cases even get sanctions against the Creditor for bad behavior. 

 

4. Improve Your Credit Score.  Yes, you read that right.  Most people think bankruptcy is the worst thing you can do to your credit. However, in many circumstances, the constant negative reporting of delinquent accounts, and the large debt to income ratio your creditor report shows, is actually more damaging that filing the bankruptcy. There are many people who actually see their credit scores improve after filing Chapter 7. I am not suggesting you will have excellent credit overnight. But filing a Chapter 7 can put you back on the path to an improved credit score, better credit opportunities, and lower interest rates. 

 

 

5. Move Forward With Your Life. The biggest benefit to a Chapter 7, is the ability to get a fresh start in your life.  Credit can be an anchor, constantly holding you back from opportunities, and stopping you from enjoying life. Credit Debt can be a taskmaster that never sleeps, never eats, never gets sick, and never stops coming after you. Even if you haven't heard from a creditor in a while, you know the debt is sitting there and you never know when it will come back after you. You don't have to live like that. Chapter 7 can give you the opportunity to start again.