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Is Chapter 7 Bankruptcy right for you?
What is Chapter 7 Bankruptcy 

A Chapter 7 bankruptcy is a valuable tool to give you a fresh financial start!  Chapter 7 is a “liquidation” bankruptcy, where a court‑appointed trustee may sell a debtor’s non‑exempt assets, if any, to repay creditors.  It is designed to wipe out most unsecured debts—like credit cards, medical bills, and personal loans—allowing individuals to start over. It’s the quickest and most common type of bankruptcy.

🌟 Benefits of Chapter 7

  • Eliminates most unsecured debts quickly, often within 3-4 months.

  • Stops collection actions, including lawsuits, wage garnishments, and many forms of creditor harassment.

  • Temporarily halts foreclosures, evictions, and repossessions while the case is active.

  • No repayment plan required, unlike Chapter 13—once debts are discharged, you’re done.

  • Allows you to keep essential property, since many assets are protected by exemption laws like your vehicle and home.

⚠️ Drawbacks of Chapter 7

  • Loss of non‑exempt property, which may be sold by the trustee to pay creditors.

  • Does not discharge certain debts, including student loans, child support, alimony, and many taxes.

  • Significant credit impact, remaining on your credit report for up to 10 years.

  • Income eligibility requirements—you must pass a “means test” to qualify.

  • Does not help you catch up on secured debts (like a mortgage or car loan) if you’re behind; Chapter 13 may be better in those cases.

 

Let’s explore ways to ease financial stress and rebuild your financial life! 

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You can, but should you?

  • S Nicky Mitchell
  • Jan 1, 2019
  • 1 min read

Updated: Jan 7, 2020

This is not the usual legal article, but bear with me.


I have been practicing family law for the last 21 years, and concentrating therein for the last 14 years. One of the most important questions I ask clients has absolutely nothing to do with their legal rights. Although the law may entitle you to particular assets, a division of debt, or a particular visitation schedule with the children, should you pursue it?


As an initial matter, clients should always consider the full panoply of options available to them in relation to their financial position in a divorce. But after a full analysis of the financial picture has been conducted, they should also consider the human costs involved.

I am often faced with clients that just want out...at any cost. No one should ever tell them, not even an attorney, that they are wrong about a decision that they have made for their lives. It is THEIR life!


For the person reading this, I will make it more personal. It is YOUR life! You will be the one left with the trauma you may endure as a result of a long, contentious divorce or ongoing tensions with a former spouse as a result of your supposed "win". Your mental health is invaluable. Sometimes it far exceeds the value of fighting with a soon-to-be former mate over visitation with the children, or distribution of the marital assets and debts, or any other issue. So when you consider your options in a divorce, always consider your mental and physical well-being as much as you do the financial one.



 
 
 

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