Discharging Debt: Appealing Benefit of Chapter 7

While there are several benefits to filing for Chapter 7 bankruptcy, discharge of debt is arguably the most appealing.

Since the primary function of bankruptcy is to disperse the debtors assets to pay back creditors the courts will often charge that a portion of the debt be discharged to accomplish this task.  Once this debt has been signed off by a judge the debtor is not nor will ever be responsible for paying it back.

After looking at the debtor's credit history and the agreement with the creditors the court could also decide to restructure the debt and change payment schedules. This will allow the debtor more time and a better chance of fixing their financial situation.  This also allows the debtor to keep some positive points on their credit score in the interim.

Keep in mind, no matter what your debts are, bankruptcy is only meant to settle those current debts on money that you actually owe.

If you have questions about Chapter 7 and your debt, contact us to receive a consultation from a Chicago bankruptcy lawyer.