Pros and Cons of Filing Chapter 7 Bankruptcy
If you have found yourself in debt, you've probably heard of, or even considered many of the different options available.
Debt Settlement, Debt Management, Debt Relief, Debt Consolidation, Debt Negotiation, and the list could continue on.
Some of these options might not work for your particular situation, or you may have tried them and they haven't worked.
So where can you turn? A last resort option could be filing for Bankruptcy.
I'm going to focus on describing the pros and cons of filing Chapter 7 Bankruptcy.
Chapter 7 Bankruptcy, when compared to Chapter 13 Bankruptcy could be a better option for most people.
When filing Chapter 7 Bankruptcy, you must pay off your creditors by selling your excess wealth.
So, this would mean selling any luxury items you might have or any unprotected items.
However, there is good news: your most important assets are safe.
Your house and your car, for example, are protected from being sold to pay off your debts.
And it could get better for you.
If you don't have many excess valuable unprotected or luxury items, you could get off fairly easily, relatively speaking.
A majority of your debts would be cleared with your creditors.
The only exception would be alimony payments and student loans, but those won't be cleared with any form of bankruptcy.
Two other positives of declaring Ch 7 Bankruptcy involve the quick declaration process (most complete in six months) and the ending of all creditor/collection calls after declaration.
However, there are a few negatives with declaring.
Declaring Ch 7 Bankruptcy causes it to stay on your credit report for ten years.
This would make it more difficult to get a mortgage, for example, and almost impossible within 2 years of declaring.
Additionally, you won't be able to declare bankruptcy again for six years.
So, after declaring bankruptcy, you must use caution so that you don't get into the same position again, especially within the first six years after declaration.
Debt Settlement, Debt Management, Debt Relief, Debt Consolidation, Debt Negotiation, and the list could continue on.
Some of these options might not work for your particular situation, or you may have tried them and they haven't worked.
So where can you turn? A last resort option could be filing for Bankruptcy.
I'm going to focus on describing the pros and cons of filing Chapter 7 Bankruptcy.
Chapter 7 Bankruptcy, when compared to Chapter 13 Bankruptcy could be a better option for most people.
When filing Chapter 7 Bankruptcy, you must pay off your creditors by selling your excess wealth.
So, this would mean selling any luxury items you might have or any unprotected items.
However, there is good news: your most important assets are safe.
Your house and your car, for example, are protected from being sold to pay off your debts.
And it could get better for you.
If you don't have many excess valuable unprotected or luxury items, you could get off fairly easily, relatively speaking.
A majority of your debts would be cleared with your creditors.
The only exception would be alimony payments and student loans, but those won't be cleared with any form of bankruptcy.
Two other positives of declaring Ch 7 Bankruptcy involve the quick declaration process (most complete in six months) and the ending of all creditor/collection calls after declaration.
However, there are a few negatives with declaring.
Declaring Ch 7 Bankruptcy causes it to stay on your credit report for ten years.
This would make it more difficult to get a mortgage, for example, and almost impossible within 2 years of declaring.
Additionally, you won't be able to declare bankruptcy again for six years.
So, after declaring bankruptcy, you must use caution so that you don't get into the same position again, especially within the first six years after declaration.
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