Are there any positive results of a Chapter 7 bankruptcy?

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Of course. One immediate result is that once the Chapter 7 bankruptcy is filed, none of your creditors listed in the bankruptcy can conduct any collection activities against you without filing certain documentation with the bankruptcy court and asking the bankruptcy judge for permission.

If your wages are being garnished, most wage garnishments are immediately stopped. However, certain obligations such as child support payments do not stop upon filing a Chapter 7 bankruptcy.

If you have lost either a home or a car to foreclosure or repossession, a Chapter 7 bankruptcy will generally eliminate the deficiency balance owed to your creditors after they have taken and resold your property for less than the amount you owed to them.

As soon as you file a Chapter 7 bankruptcy your creditors must immediately stop any sort of collection activity against you, including a foreclosure or repossession. It is important to remember, though, that the filing of the Chapter 7 bankruptcy only slows down a foreclosure or repossession; it does not eliminate the foreclosure or repossession.

If you owe IRS or state taxes, filing bankruptcy stops the IRS and state tax agencies from any form of collection activity during the Chapter 7 bankruptcy process. Depending on the circumstances, you may be able to also eliminate some of your tax debt.

Probably the most important benefit is that most credit card debt, medical bills, broken leases, certain deficiency judgments and other types of unsecured debt are eliminated in a Chapter 7 bankruptcy, and you get a financial fresh start.