Perhaps the biggest advantage of filing a Chapter 7 Bankruptcy is the possibility of having some or all of your debts discharged. When a debt is discharged, it is cancelled by the Court and you do not have to repay it unless the debt is secured.
Secured debt is debt that is tied to your property, such as mortgages and car loans. When you file for Chapter 7 bankruptcy, your personal obligation to repay the debt is wiped out. This is true whether you keep the property through your Chapter 7 or surrender it. If you keep the property you must continue to make payments or the lender will repossess it.
The benefit is that you can keep paying the debt for as long as you want to keep the property (assuming the property is exempt and cannot be taken by the trustee). If you fall behind or decide to give up the property at a later time, you can do so without having to worry about being chased for the deficiency or balance due.
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