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What are the benefits of a Chapter 7 bankruptcy filing?

One of the most obvious is the automatic stay that goes into effect immediately. The automatic stay suspends lawsuits pending against the petitioner, blocks creditors from repossessing property, including bank foreclosures and automobile repossessions; prohibits landlords from evictions; bars utilities from disconnection of service; and, perhaps most welcome for the debtor, stops creditors from calling.

The stay remains in effect until 1) the bankruptcy action is complete; 2) the judge lifts it at the request of a creditor, or 3) the property in question is no longer part of the bankruptcy estate.

Moreover, unless debts are enormous and assets very few, a debtor emerges from a Chapter 7 bankruptcy freed of all dischargeable debt, including unsecured debt.