Deciding that you need to file a Chapter 7 bankruptcy doesn’t mean you’re a failure — it simply means you can no longer manage your debts and need to seek a new start with your finances. In 2013 alone, approximately 728,833 Chapter 7 bankruptcies were filed, so you’re definitely not alone if you think this form of bankruptcy is right for you.
Knowing the consequences of filing bankruptcy with a Chapter 7 bankruptcy attorney is an important step to take before you start along the Chapter 7 bankruptcy timeline. That’s why we’ve compiled this list of the top pros and cons of filing a Chapter 7 bankruptcy:
Pro: Chapter 7 bankruptcy provides immediate relief from debt
Creditor harassment can be a major source of stress, especially when you’re unable to make your loan payments. But as soon as you seek out bankruptcy help from a Chapter 7 bankruptcy attorney, the constant calls from debt collectors will cease immediately, offering the peace of mind you deserve.
Con: Chapter 7 bankruptcies affect your credit score for a long time
Filing a Chapter 7 bankruptcy will go on your credit report — and it will stay there for 10 years after you file. This can make it difficult for you to obtain loans and financing for large purchases; however, if you maintain good financial habits, you can slowly rebuild your credit score.
Pro: Chapter 7 bankruptcies rid you of all your debt — no matter how much
There is no minimum or maximum to the amount of debt that can be erased during a Chapter 7 bankruptcy; nor is there an income limit. That makes this type of bankruptcy good for virtually any income level that has found itself overwhelmed by financial burdens.
Con: There are certain types of debt not covered in a Chapter 7 bankruptcy
Unfortunately, some debts aren’t covered under a Chapter 7 bankruptcy. These include student debt, child support and alimony. Only defaulting on student loans or obtaining a court order to be exempt from child support or alimony will get you out of them.
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