(Video) Why Is Chapter 7 Referred to as a "Fresh Start" Bankruptcy?

Posted by Wesley Scott on July 17, 2018 at 11:07 AM
Wesley Scott

You have heard this before right? A Chapter 7 Bankruptcy is sometimes referred to as a “Fresh Start” bankruptcy? But what does this mean? It means this- it means that in a Chapter 7 Bankruptcy, you do not make payments back to your creditors. At the end of about a 4 month process your liability on your debts is wiped out (discharged), forever, tax free! Now, that sure seems like a “Fresh Start” to me, how about you?


If you have say 75k in credit card debt and your payments are $2500.00 per month, getting rid of 75k in credit card debt, and eliminating the payments, tax free, forever, would be a HUGE “Fresh Start”. The problem with debt consolidation or any sort of debt settlement is 1) it looks bad on your credit because you didn’t pay it and 2) and debt forgiven is taxable to you. So, you sort of get nailed twice. Chapter 7 Bankruptcy, on the other hand, is a clean break, because the debt is gone and there is no tax liability.

I often tell people it is healthy to reinvent yourself every so often. Filing Chapter 7 Bankruptcy is also a way to reinvent yourself. You go from a person suffering with overwhelming debt to a person with no debt. Have you ever wondered what it would be like to go back in time and eliminate something you wish you would not have done? That is what it’s like to do a Chapter 7 Bankruptcy.

We have never had a single person regret filing Chapter 7 Bankruptcy and getting a “Fresh Start”. You will not be the first.

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When the time is right, or when you are ready, reach out to Minnesota’s MOST recommended and Google reviewed bankruptcy law firm at www.kainscott.com. You will be glad you did.

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Topics: Chapter 7 Bankruptcy, Filing Bankruptcy, MN Bankruptcy