Filing for bankruptcy protection erases debt to your creditors.
What is the downside of filing for bankruptcy?
Listen to this Article on:
Advantages and Disadvantages of Filing for Bankruptcy.
Advantages and Disadvantages of Filing for Bankruptcy.
Filing for bankruptcy protection is considered a statement of your ability to repay your debt to your creditors. Conversely, the fact that you sought and received bankruptcy protection will remain on your credit record for as long as ten years.
What Are the Pros and Cons of Filing for Chapter 7 Bankruptcy? Filing for bankruptcy offers a powerful way to eliminate debt and get a fresh start. Notwithstanding, as with everything, there are downsides to filing for bankruptcy.
Chapter 7 bankruptcy is one of the most powerful debt relief options available in the United States. It has helped many people get out of poverty and get a clean financial slate. Moreover, it gives you a fresh start by erasing your debts. But filing for bankruptcy is a personal decision, and it’s important to consider whether it’s the right option for you entirely.
What are some of the benefits of Chapter 7?
Automatic Stay Protection: As soon as the case is filed, the “automatic stay” takes effect. It bans creditors from most collection actions.
Future Wages: Once a Chapter 7 bankruptcy is filed, creditors cannot reach your wages. Your future paychecks are yours to keep and use for necessities, food, rent, etc.
Permanent Protection: A permanent ban against most creditors following discharge. Only certain debts such as support obligations & recent taxes are not erased.
Ordinarily, You Get To Keep Most Of Your Stuff
Exemptions protect most “typical” assets – the types of property most people own, like clothes, furniture, cars, tools of the trade, etc.
No Shame: Giant corporations are declaring bankruptcy – filings are up 35% from last year! Why shouldn’t you use the same laws to get the same relief?
Please Help Us Spread The Word By Giving Us a 5 Star Rating on This Article
Free Initial Consultation with
Steven F. Bliss Esq.
★ ★ ★ ★ ★
What are the downsides of Chapter 7 bankruptcy?
Public Record: The bankruptcy court’s docket is open to the public. People looking for this information can find it. Notwithstanding, not many people look anyway.
Income Limits: Not everyone can file for Chapter 7 bankruptcy. The bankruptcy means test analysis decides.
Give Up Luxury Items: Items not protected by an exemption are liquidated (sold) by the trustee. The proceeds are paid to creditors. State law determines what exemptions you can claim.
Accordingly, we need to rebuild credit.
Nevertheless, only a “downside” if you have perfect credit now. If your credit is below 600 right now, filing Chapter 7 – if possible – is the fastest way to a score of 800+
Is Bankruptcy the Best Solution?
Anyone considering bankruptcy needs to understand the process and the laws surrounding bankruptcy. A licensed bankruptcy attorney should address questions about bankruptcy.
Alternatives to Bankruptcy
There are alternatives to bankruptcy, and you can avoid bankruptcy with outside help. It is essential to get early advice about bankruptcy if you hope to use the bankruptcy process to save your home or your car. Successful debt management can be a valuable alternative.