The Pros and Cons of Declaring Chapter 7 Bankruptcy

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Chapter 7 Bankruptcy Attorney
Diving into bankruptcy is not a good idea. Any Chapter 7 bankruptcy attorney will tell you that there are advantages and disadvantages to declaring Chapter 7 bankruptcy, all of which must be weighed. Check them out here to figure out if it’s the best way for you to restructure your debts or not:


  • The actual process doesn’t take too long, and is usually over with three to six months. That being said, it does stay on your record for years. Your missed debt payments, defaults, and repossessions — not to mention possible lawsuits — will also hurt your credit score.
  • Most states have exemptions in place that prevent important possessions from being liquidated, and sometimes they even allow you to keep more of your property than you need. You will be able to keep your salary and the things you purchase after you file Chapter 7 bankruptcy.
  • The sooner you get debt assistance, the sooner you can start rebuilding your credit and entire life. Use the required financial counseling to your advantage and use bankruptcy as an opportunity to start budgeting, saving, and refraining from taking out loans.


  • Bankruptcy of any kind can ruin your credit for a long while to come. A Chapter 7 bankruptcy stays on your credit report for 10 years after it is arranged.
  • You will lose all of your credit cards, and also any property that was not exempt from sale by the bankruptcy trustee, plus any other luxury items that weren’t exempt.
  • Declaring bankruptcy now may make it harder to declare later if you are in a more dire situation. That’s why you should make sure that it’s absolutely necessary. If you file Chapter 7, you cannot file again under that chapter for another six years.
  • Chapter 7 (or Chapter 11 or Chapter 13 bankruptcy) will never exempt you from child support payments, alimony, or student loan payments.

The fee for filing bankruptcy under Chapter 7 in the U.S. is currently $306 — which could be excessive if you truly have no money, but is also relatively cheap as far as loan forgiveness and debt alleviation go. Consult your Chapter 7 bankruptcy attorney for how best to go about filing for bankruptcy.

Chapter 11 Bankruptcy

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chapter 11 bankruptcy explainedBankruptcy cases are more common than you might think. In 2013, there were an estimated 1,071,932 bankruptcy filings in the United States. Of these cases, a majority were Chapter 7 cases (728,833 of them, to be exact). But a sizable amount (8,980 cases that year) were Chapter 11. Most people are familiar with Chapter 7 bankruptcy, as that is what one would most likely file as an individual, but it is also important to know about all the specificities of each case. Proceed to see Chapter 11 bankruptcy explained:

Chapter 11 is also sometimes known as a “reorganization” bankruptcy and is often used specifically for a corporation or partnership. People in business, or individuals, can also seek relief under Chapter 11, granted they meet certain specifications. For example, you may be eligible if you have too much debt or income to qualify under Chapter 7 or 13.

The point of Chapter 11 is to allow a struggling business or business individual to restructure their finances in order to maximize the return to their creditors and investors. Some notable filers under Chapter 11 bankruptcy include General Motors, United Airlines, Lehman Brothers, and K-Mart.

As with most other types of bankruptcy, the first step is to file a petition in bankruptcy courts. Typically, these cases are voluntary.

There is no absolute limit on the duration of a case of Chapter 11 bankruptcy. Some can last a few months. Others can last up to two years.

The major characteristic of Chapter 11 bankruptcy is that, although the filer usually continues to conduct business, they do lose control over major decisions. The bankruptcy court must now approve any sale of assets, like property, the entering into or breaking of a lease, mortgage or other financing arrangements, and the shutting down or expansion of business operations.

Usually, the debtor has a chance for four months after they file Chapter 11 to propose a reorganization plan. After that period has ended, the creditors’ committee or other involved parties have the chance to propose competing reorganization plans.

Essentially, a Chapter 11 case leads to a contract between the debtor and lender as to how it will operate and pay its obligations in the future. If you or your business is thinking of filing for bankruptcy under Chapter 11, contact a bankruptcy attorney to have Chapter 11 bankruptcy explained fully.

What Not to Do Before Filing For Bankruptcy

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bankruptcy attorneyIf you are planning to file for bankruptcy, then you need to prepare yourself for the road ahead. There are many preparations that you need to make before you can successfully file, but just as importantly, there are some things not to do, lest they affect your bankruptcy case in the long run. Follow these tips, and you will be set for smooth sailing.

Do not give your bankruptcy lawyer dishonest or false information
Your bankruptcy attorney is there to help you. They understand that filing for bankruptcy can be a hard decision, but they deserve to know everything they can. This means full disclosure when it comes to your assets, debts, income, and financial history. If you knowingly lie about your finances or withhold information, then you could be subject to criminal persecution.

Get more in debt
You need to stop your spending the minute you decide to file for bankruptcy. If you do not, then the creditors can potentially deny your claims to liquidize all the debts owed to them. If you rack up more debt within 70 to 90 days of filing, then you can be persecuted for fraud, which is the action of taking out a loan with the intention of not paying it back. If you have any questions about what to do, just contact your bankruptcy attorney and they will give you advice.

Choose the wrong type of filing without thinking of the consequences
There are three main types of bankruptcy: Chapter 7, 11, and 13. Each comes with its own pros and cons, but it’s crucial to understand the differences, and choose the most appropriate path for your situation. If you choose incorrectly. you can suffer long-term effects.

For example, takef Chapter 7. It costs $306 to file, takes about six months to complete, and stays on your credit report for 10 years after it is arranged. Think long and hard about what you are about to do, because while filing for bankruptcy can be a great solution to many people’s financial hardships, it’s not something to be entered into lightly. Again, your bankruptcy attorney will help guide you in this choice.

Move your assets
Do not be tempted to move any of your assets to a different bank or another person’s name for safekeeping. If you have already claimed those assets, then you can be criminally penalized if the courts cannot locate them at the time of the hearing.

In need of financial advice from a bankruptcy lawyer? Contact the Law Offices at Charles Huber today.

What to Know Before Filing For Bankruptcy – Part 2

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Lets continue on in our series on what to know before you file for bankruptcy!

Bankruptcy filings are public documents
file for bankruptcy


Because the paperwork from your bankruptcy case is public, anyone who wants to look up your current or past financial situation is able to. The names of those who file are posted both online and in newspapers, so you will loose some control on your financial privacy.

Filling for bankruptcy comes with specific requirements
The court judge will decide what creditors you pay back and when. You may be forced to relinquish rights on all your credit cards, and may have a lawyer imposed rule on what you can and cannot spend money on.

It costs money
There are many costs that come when you file for bankruptcy. You have lawyer and paralegal fees, court filing fees, and paperwork fees. Typically, the fee for filing chapter 7 bankruptcy in the United States is around $306.

You should also be wary of bankruptcy attorneys advertising very low fees, as you want a quality lawyer with experience to help you navigate court. As strange as it may sound, filing for bankruptcy is not the time to scrimp on money!

Your creditors may disagree
It is important to know that just because you file for bankruptcy it does not mean your creditors will agree with you. There will be a meeting of the creditors, and the creditors have the right to deny your request to liquidate the debt owed to them.

Chapter 7 is more popular than Chapter 13
Chapter 7, the liquidizing of assets method, has proven to be more popular than any other method. In 2013, there was a total of 728,833 Chapter 7 bankruptcies filed, compared to 333,626 Chapter 13 bankruptcies.

This won’t fix everything
As much as you wish that filing for bankruptcy will fix all of your financial problems, it will not. After the process is over, it is important to recognize how you got to that situation and how to ensure you never have to return.

If you are filing for bankruptcy or have any other questions about how the process works, do not hesitate to contact the Law Office of Charles Huber today.

What You Need to Know Before Filing For Bankruptcy- Part 1

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filing for bankruptcyFiling for bankruptcy can be a tricky decision, but it does not have to be scary. It is important to know that you have options, and there are many people available to help you through your bankruptcy case. In addition, you are not alone, as there were an estimated 1,071,932 bankruptcy filings in the U.S. during 2013. Here is our first installment on what to know before filing for bankruptcy.

1. There are two main options, Chapter 7 bankruptcy and Chapter 13 bankruptcy
Once you have chosen to file, then you must decide which path is better for you.

Chapter 7 is liquidation bankruptcy; it will relieve all of your outstanding debt, including personal loans and credit cards. You will have to take a “means” assessment, which will determine if you have enough income. If you do not, you may have to sell any non-liquidated assets. Generally, if you choose to file under this method, then you will be able to keep most assets. The process takes around six months to complete.

Chapter 13 bankruptcy reorganizes your finances, and will require you to pay back your lenders over time. While no property or assets are liquidized, this process can take between three to five years to complete. To be eligible for this method, you must have a stable income and the ability to make monthly payments.

2. Your credit will be affected
Do not expect to file for bankruptcy and get a free pass when it comes to credit. Your credit will be affected, as a Chapter 7 bankruptcy will stay on your credit report for 10 years after it is completed. In addition, you will have to declare your bankruptcy history to any future employers, on medical forms, and on official governmental reports. As it stays on your report permanently, you will want to make sure this is the right option for you before filing.

3. Bankruptcy cannot fix everything
There are certain aspects of credit that cannot be fixed with bankruptcy. This includes back taxes, student loans and child support. If you are struggling to pay these debts, try seeking help from credit counseling, loan refinancing, and/or credit card consolidation.

Stay tuned for Part 2: what you need to know before filing for bankruptcy!