What Are the Pros and Cons of Filing for Chapter 7 Bankruptcy?
Making the decision to declare bankruptcy is a stressful and difficult one. However, bankruptcy can offer you many benefits, including discharging your debt and setting you up for a debt-free future. There are several different types of bankruptcy options to consider, each offering a set of pros and cons. Chapter 7 bankruptcy is one option that could offer the best solution to your specific situation. Some of the cons associated with Chapter 7 include:
- Bankruptcy will affect your credit for an extended period of time. Chapter 7 bankruptcy can remain on your credit report for up to 10 years.
- You may lose property that is not exempt from sale, including luxury possessions.
- You will probably lose your credit cards.
- Bankruptcy will make it difficult to get a mortgage for several years.
- Once you have filed for Chapter 7 bankruptcy, you cannot do so again for six more years.
- Bankruptcy will not relieve you of obligations to pay alimony, child support or student loans.
- During the process, you will have to explain to a judge or trustee how you went into debt.
- You may still be obligated to pay some debts like mortgage liens.
Despite some of these drawbacks, there are many benefits to filing for Chapter 7 bankruptcy, including:
- While bankruptcy will stay on your record for years, the time to complete Chapter 7 bankruptcy, from filing to debt relief, is only 3-6 months. If you are in debt and unable to pay it, your credit will be hurt anyway. At least when you file bankruptcy you can discharge much of it.
- Declaring bankruptcy will allow you to start over fresh and rebuild your credit.
- If you do not owe money on debts that survive bankruptcy, the amount of debts that can be relieved is potentially unlimited.
- Chapter 7 offers the added benefit of not requiring you to have debts of any particular amount in order to file.
As you can see, there are many pros and cons to filing for bankruptcy. The best way to determine the right options for you is to speak with a bankruptcy attorney like those at the Oswalt Law Group. We have the knowledge, skills and resources to help you make the best decisions about your financial future. We can help you throughout the entire process so you can come out debt-free.