Making the decision to file for bankruptcy is a huge step, but often a necessary one when you reach a point where your debts become unsustainable and you have very few assets. Filing a Chapter 7 bankruptcy will allow you to wipe the slate clean. Before you make any decisions, make sure you understand the pros and cons of it and weigh them against your own needs and goals. It would also be wise to consult with an experienced bankruptcy attorney to ensure that you are making the best decision for your situation. In the meantime, we have compiled a list of the pros and cons for declaring a Chapter 7 bankruptcy, which you should take a moment to review.
The Pros of a Chapter 7 Bankruptcy
- The process for declaring a Chapter 7 bankruptcy is typically over within about three to six months, which is relatively short. That said, while the process itself is not too time-consuming, it will remain on your record for up to 10 years. Your missed debt payments, defaults, and any lawsuits against you will also harm your credit score.
- Oftentimes, there are exemptions in place that prevent important possessions from being liquidated, and you might even be allowed to keep more of your property than you need. You will also be able to keep your salary and other items you purchase after filing a Chapter 7 bankruptcy.
- Assuming you do not owe money on the types of debts that survive bankruptcy, such as a mortgage lien, the amount and number of debts that a Chapter 7 bankruptcy can relieve you from paying is potentially unlimited.
The Cons of a Chapter 7 Bankruptcy
- You will lose all of your credit cards as well as any property that was not exempt from sale by the bankruptcy trustee, in addition to other luxury items that were not exempt.
- If you declare bankruptcy now, it will be harder to declare it later if you find yourself in an even worse financial situation. Make sure that filing for a Chapter 7 bankruptcy is necessary. Once you file a Chapter 7 bankruptcy, you will not be able to file again under that chapter for another 8 years.
- If you previously filed a Chapter 13 bankruptcy and less than 70% of your unsecured debt was paid to creditors in good faith, you must wait 6 years before you are able to file a Chapter 7 bankruptcy.
Ultimately, the only way to know for certain what the proper course of action is, would be to discuss your case with an experienced bankruptcy attorney. A lot is at stake, so never choose to gamble with your financial future.
Bankruptcy Attorney in Chicago
If you need to file bankruptcy, you should know that you do not need to go through this difficult time on your own. Attorney Joseph P. Doyle will help you take those crucial steps toward achieving the financial freedom you deserve. Our legal team will discuss all options available for your circumstances and ensure you find the solution that works best for you and your future.
For the legal assistance you need, contact us at (312) 957-8077 to schedule a free bankruptcy case evaluation.