Chapter 7 Bankruptcy Advantages
Like Chapter 13, anyone filing for Chapter 7 Bankruptcy protection obtains the immediate benefit of the Automatic Stay—meaning that all collections, phone calls, wage garnishments, law suits, home foreclosures, evictions, and other collection activities by creditors must stop once the case is filed in the San Jose Bankruptcy Court. Chapter 7 is not a payment plan. If a debtor qualifies by demonstrating that he cannot afford to make monthly payments after taking into account necessary living expenses, then Chapter 7 can offer a short path to a discharge of most unsecured debts like credit cards and medical bills.
Advantages of Chapter 7 bankruptcy include:
- Chapter 7 does not require ongoing monthly payments on most debts.
- Chapter 7 cases are short. Chapter 7 cases generally last only a few months rather than years.
- In some cases, older tax debts can be discharged in Chapter 7 bankruptcy.
Some Disadvantages of Chapter 7 Bankruptcy
Chapter 7 does have certain risks and disadvantages. These include the fact that the debtor may be required to give up some assets to the Bankruptcy trustee if she owns assets with a value greater than she may protect under the available bankruptcy exemptions. Also, if the debtor is self-employed as a sole-proprietor, the Bankruptcy trustee can force the debtor to stop operating her business while the case is pending.
Chapter 7 bankruptcy also does not provide a vehicle for curing a delinquent home mortgage and thereby avoiding foreclosure in the long term as Chapter 13 can. Similarly, Chapter 7 cannot provide a path to pay off non-dischargeable debts such as priority taxes or delinquent child support obligations.
Debtors with property and assets they want to save, debtors with small businesses, and those who are seeking to pay off taxes, for example, are often better protected in Chapter 13 bankruptcy.
However, if a debtor earns less than the California median income for her family size and does not own real estate or other assets with values greater than she can exempt (protect from liquidation), then Chapter 7 bankruptcy may be the best and quickest path to a fresh start for many seeking the protection of bankruptcy in San Jose.
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Jon Brooks was wonderful to work with on filing for bankruptcy. He is professional, polite, and very detailed. I'm so grateful I'm debt free... Read moreMichelle D., San Jose
I just wanted to take this time to say that I had the privilege of being represented by my bankruptcy attorney Jon. At first I was really te... Read moreFrank S., San Jose
Jon focused on the key issues quickly, and knew critical answers I could not find elsewhere – even from other attorneys! I highly recommen... Read moreC.C., San Jose
If you are reading this, chances are you haven’t been on a ‘winning streak’ in your life lately. When my wife and I came in to see Jon... Read moreKeith A., San Jose
Jon provided me with the pros and cons of what type of bankruptcy to file which I understood very well as they were presented to me and my w... Read moreTony G., Fremont
Jon Brooks demonstrated confidence, compassion, and professional integrity while handling my challenging bankruptcy case. He skillfully disc... Read moreLisa C., Palo Alto
I can't thank Jon enough for helping us through the most difficult time in our life. Coming to the conclusion that I had to file bankruptcy ... Read moreJ.S., San Jose
Choosing Jon to represent me in my bankruptcy case was the best decision I have ever made! He is extremely knowledgeable and explained every... Read moreSara L., Campbell
Jon Brooks helped us get a fresh start without making us feel ashamed for our bankruptcy. He and his staff were professional to an ultimate ... Read moreY. Carter and D. Carter, San Jose
I am a young single mother that went through a very difficult time and knew bankruptcy was the smartest option for me at the time. Mr. Brook... Read moreS.M., San Jose
We were saved by the office of Jon Brooks when our country was in the Great Recession. They solved our second mortgage and debt problems pow... Read moreSam S., San Jose
Jon Brooks and his wonderful team helped me with my bankruptcy case and gave me back my peace of mind. My initial (free) consultation with M... Read moreRaquel P., San Jose
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