At first sight the title above may seem contradictory. How can filing for Chapter 7 bankruptcy be key to rebuilding your credit? After all, this statement is against everything your creditors and collections agencies have been telling you. In order to understand how Chapter 7 can help you it is best to explain the benefits of filing a Chapter 7 bankruptcy.
Benefits
The first benefit in filing for a Chapter 7 is the automatic stay. What this means for you is that the creditors included in your Chapter 7 must stop all collection action immediately. This means that they will not be allowed to place a lien on your bank account, foreclose on your home or repossess your car. If these actions have already started against you, the creditor will have to reverse or stop the action right away.
The second benefit is that you will no longer be legally held to repay most (if not all) of your debts. You will not be obligated to pay your debts once your Chapter 7 bankruptcy is discharged.
In order to understand what debts are dischargeable it is important to consult with an experienced bankruptcy attorney in your area. Contact law firm Fears | Nachawati toll free at 1.866.705.7584 or via e-mail at info@fnlawfirm.com to discuss your specific financial situation.