Top 3 Advantages of Chapter 7 Bankruptcy Code

Bankruptcy laws have quite a turbulent history in the United States. The first time America saw bankruptcy laws come into being was in 1800. A mere three years later, the law was revoked. In 1841, another law was put into place, only to be repealed in 1843. 25 years later, new bankruptcy laws came into effect in 1867, followed by an amendment in 1874 and revocation in 1878.

The United States’ first modern bankruptcy legislation was enacted in 1898, known as the Nelson Act. The next bankruptcy reform came almost a century later in 1978. The bankruptcy reform was then amended in 2005 with the addition of the Bankruptcy Abuse Prevention and Consumer Protection Act.

Today the US has six Bankruptcy Code chapters in place, namely, chapters 7,9,11,12,13, and 15.

In today’s blog, we attempt a closer look at the benefits of chapter 7 bankruptcy over others. All information provided below is meticulously curated and approved by our chapter 7 bankruptcy lawyers.

Chapter 7 Bankruptcy and its Benefits

Chapter 7 is easily the most popular bankruptcy chapter code in Oklahoma and the rest of the country. Chapter 7 essentially liquidates your non-exempt assets and the proceeds are then used to pay off creditors.

The court also possesses the power to discharge certain unsecured debts with the exception of tax arrears, student loans, child support, and some other fines imposed by the court.

Relieve Your Debt

Chapter 7 bankruptcy enjoys massive popularity due to its ability to ensure a fresh start for the debtor. The greatest upside to filing Chapter 7 bankruptcy is that it discharges most unsecured debt, along the likes of medical expenses, credit card debt, and personal loans.

Individuals, the self-employed, small businesses, and even corporations are allowed to file for Chapter 7 bankruptcy. The best part is that there is no upper limit to your debt. However, you will be required to receive credit counseling from an approved agency within 180 days prior to the date of filing.

Pause Collections and Repossessions

An individual or entity applying for Chapter 7 bankruptcy is legally protected from collection actions, threats of repossessions, and general harassment from the creditor(s). It will stay lawsuits and garnishment of your wages.

The Bankruptcy Code also extends protection to exempted property, meaning the trustee is not allowed to sell it to repay the creditors.

Now, exemptions are subject to variation by the state, but Oklahoma state includes all items necessary for daily life, for example, your car, furniture, home appliances, clothes and a respectable portion of your home’s equity.

Obtain Credit Flexibility

Applying for Bankruptcy has a rather untoward impact on your credit report. Creditors are going to refuse to loan money to underwater borrowers. In fact, it might even affect your ability to get a job as most HR teams run a check on the credit report. However, Chapter 7 bankruptcy is a way to remission. Over time you will be able to recover your credit score. The bankruptcy will still show up on your credit report but if you stick out through the complete bankruptcy process, you will soon find creditors not holding the bankruptcy against you.

Here to Make Bankruptcy Easier

Reneau Law Group has been providing Oklahomans with quality and affordable legal representation for over 20 years. You can start filing your bankruptcy with us for as little as $300! Soon after, our team will reach out to you with a questionnaire. Upon submission of the questionnaire along with certain requested documents, we will begin preparing your case.

We also have payment plans available for our clients. To contact us, find our website online. You can also call us at (405) 732-5432.

**Disclaimer: The above article does not imply a relationship between attorney and client, nor does it aim to provide any legal advice.