Deciding to declare for bankruptcy may seem like a daunting decision for many. Admitting that you may not be able to overcome your financial challenges is not an easy decision, but it is important to remember that bankruptcy is designed to help you overcome the burden of debt, and although the recovery process may not be quick or easy, in the long run declaring for bankruptcy may be the way to go.
It is important to understand the differences between Chapter 7 and Chapter 13 bankruptcy, and to learn which one is right for you. Let's take a look at some of the pros of filing for Chapter 7 bankruptcy.
Chapter 7 bankruptcy will stay on your credit report for up to 10 years, which will affect what you are able to do, but the process itself is rather quick, lasting between three and six months from the time of your filing until your debt relief.
Although you may lose luxury possessions you may own, you will be able to keep your existing and future wages and salary and property you purchase after filing. You will not lose everything however, as some of your possessions will be protected by state exemptions.
Although you will lose your credit cards and will not be able to apply for a mortgage, within one to three years you may be able obtain new lines of credit. The down side is, with your credit report having already taken a hit, you will be paying a much higher interest rate.
As you can see, there may be many complexities involved with filing for Chapter 7 bankruptcy, and there will be financial restrictions on you for the immediate future after filing. It is worth noting, however, that the impact of filing for bankruptcy may still be better than struggling to overcome your current debt, so at the very least, it is worthy of consideration.
Source: findlaw.com, "Pros and Cons of Declaring Bankruptcy under Chapter 7," Accessed April 24, 2017