If you have reached a point where your debts have become impossible to manage, it may be time to think about filing for Chapter 7 bankruptcy. This is an effective solution for many people looking to gain a fresh financial start. However, there are pros and cons to consider before making such a major decision. Learn what some of these are below to determine if it’s the best option for your situation. 

What to Consider Before Filing a Chapter 7 Bankruptcy 

Pros 

One of the biggest benefits of a Chapter 7 bankruptcy is that you can generally expect to be absolved of your debts within three to six months. As soon as you begin the filing process, an automatic stay will be granted, preventing creditors from harassing you or taking action to collect what you owe. Furthermore, when your financial obligations are discharged, you will no longer be responsible for paying back anything considered to be unsecured debt, including credit card bills, medical expenses, and personal loans. Though Chapter 7 is referred to as liquidation bankruptcy, most states have exemptions that allow debtors to keep their valuable property. 

Cons 

Unfortunately, declaring bankruptcy will lower your credit score and make it difficult to get approved for new lines of credit. Chapter 7 bankruptcy typically stays on a credit report for 10 years. Should you need to apply for a car or mortgage loan in this timeframe, you may be faced with significant challenges. Also, you will still need to carefully consider the possibility of losing assets that aren’t listed under your state’s exemptions. Additionally, you will still be responsible for paying for any secured debts you have, such as student loans, alimony, child support, and taxes.

Deciding whether or not to file a Chapter 7 bankruptcy is not easy, but if you’re willing to deal with the short-term disadvantages, it can provide the long-term debt relief you’re looking for. When weighing out the various pros and cons of filing, it’s helpful to consult an attorney. Brian R. Cahn & Associates are vastly knowledgeable and experienced in bankruptcy law and will ensure you’re adequately educated to make the right choice for your future. For more than 25 years, they have been entrusted to guide Cartersville, GA, residents through the process of eliminating financial trouble. Contact them at (770) 382-8900, or browse their website to learn more.