When facing dire financial circumstances, it's critical to consider all your options. For example, there are many benefits of filing for Chapter 7 bankruptcy, including the ability to discharge some — or even all — of your debts.
While the benefits of Chapter 7 bankruptcy typically outweigh the potential disadvantages, you should still be aware of the following:
- Chapter 7 bankruptcy is a red mark on your credit report: With this remaining on your credit report for 10 years, you'll find it challenging to secure a loan in the immediate future. However, as time goes by, you can boost your score once again if you remain out of debt.
- You could lose some property: Not all property is exempt from seizure in Chapter 7 bankruptcy, so it's possible you might have to part with some of the items you love. Many luxury possessions will be at risk.
- It doesn't relieve you of all your debts: For example, if you have student loans or owe child support or alimony, Chapter 7 bankruptcy has no impact on them. You're still required to keep current with these obligations, both during and after your bankruptcy filing.
Before you file for Chapter 7 bankruptcy, compare the pros and cons to ensure that you're getting what you want from the process. If everything checks out, learn more about getting started, including the information you need to collect, passing the means test, and how to put the wheels in motion.
A Chapter 7 bankruptcy discharge comes quickly, typically within a few months, so you're closer than you think to finally solving some of your financial issues.