Financial Advantages in Chapter 7

: Chris Lee Law Firm

  Filed under: Chapter 7

Chapter 7Some people see filing for  bankruptcy as a negative thing, but in fact there are a distinct set of financial advantages afforded to a person coming out of a Chapter 7 filing. Here are a few advantages you may not have thought of when considering Dallas bankruptcy before.

Decreased Debt Ratio

Coming out of a Chapter 7 bankruptcy discharge, a person’s debt-to-income ratio looks a whole lot better than it did prior to the bankruptcy. Much, if not all, of their debt has been eliminated in the bankruptcy, while presumably their income has remained the same. As a result, the debt-to-income ratio, a number that many creditors look at to determine a person’s eligibility for loans, plummets. That’s a good thing, and can result in getting new loans out of bankruptcy more quickly than one might imagine.

Furthermore, since a person comes out of Chapter 7 bankruptcy with little to no remaining debt, it becomes much easier to start saving for the future, without having to look over one’s shoulder for the debt collector. Many experts recommend saving ten percent of your total income, something that is easily within the abilities of most wage earners by just cutting a few corners and eliminating a few extraneous purchases. Saving ten percent a month could easily result in a tidy little savings account in just a year or two. Combined with slowly rebuilding credit thanks to the reduced debt-to-income ratio, these advantages can give a person coming out of Dallas bankruptcy a fairly rosy outlook for the future.

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