If you are struggling with an overwhelming amount of debt, it is time to consider filing for bankruptcy. Bankruptcy offers so many benefits, like a debt-free fresh start and relief from incessant collection phone calls. While bankruptcy offers so much, there are drawbacks that must be considered as well, here are the pros and cons of filing chapter 7 bankruptcy.
To help you decide whether Chapter 7 bankruptcy is the best option for you, consider the following pros and cons.
Filing Chapter 7 Bankruptcy “Pros”
- A successful Chapter 7 bankruptcy can give you a debt-free fresh start.
- Chapter 7 eliminates most unsecured debts, including credit card debt and medical debt.
- The money you were spending on monthly debt payments can be redirected toward wise financial choices, such as saving for retirement and having sufficient emergency savings on hand.
- Most people are able to keep most or all of their personal belongings and other assets through bankruptcy.
- Filing for bankruptcy will immediately stop all collection actions, including collection phone calls, wage garnishment, bank levies, and lawsuits for unpaid debts.
- Filing for Chapter 7 will at least temporarily halt a foreclosure sale or vehicle repossession.
- Even people with high income are often able to qualify for Chapter 7 bankruptcy relief.
- You do not have to pay taxes on debts erased in bankruptcy.
- After bankruptcy people are still able to get car loans, lines of credit, and home loans.
- A Chapter 7 bankruptcy filing will fall off of your credit report after 10 years.
This is only a cursory review of all of the benefits of Chapter 7 bankruptcy. To explore exactly how Chapter 7 can benefit you, meet with us for a free consultation.
Filing Chapter 7 Bankruptcy “Cons”
- Depending on your specific case, you may still owe on some debts after bankruptcy.
- Not all debts can be erased in Chapter 7 bankruptcy, such as student loans, back child or spousal support payments, newer tax liabilities, certain government imposed fines, and certain other debts depending on the type of debt and how and when the debt was incurred.
- Filing for bankruptcy will affect your credit score; however, if you have already fallen behind on your debts, your score has likely already decreased.
- You may lose property or assets if their value exceeds what is exempt under bankruptcy law.
- A bankruptcy filing will appear in certain background checks and may affect your security clearance.
- Chapter 7 Bankruptcy does not create an opportunity to catch up on mortgage arrears or missed car payments (through Chapter 13 Bankruptcy can).
- You may feel bad about filing for bankruptcy―but bankruptcy protection is your legal right and may be the best financial decision you can make.
For most people who are at the point of considering bankruptcy, the pros will far outweigh the potential cons. To explore how Chapter 7 can benefit you and what cons you may face, meet with us for a free consultation.
Filing for Chapter 7 Bankruptcy
It is our mission to ensure that you understand the power and benefits of Chapter 7 bankruptcy, as well as any drawbacks you may face. We’re here to answer all of your questions. Call us right now (912) 351-9000 to schedule a free consultation.
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We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code. Find out more about Bankruptcy in our guide: All About Bankruptcy.