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The Pros & Cons of Filing Chapter 7 Bankruptcy

Are you unable to pay your home or car payments? Does it feel like you are being crushed by a mountain of debt? Have you ever considered wiping your financial slate clean by filing for individual Chapter 7 Bankruptcy? Known as either straight or liquidation bankruptcy, Chapter 7 is the type of bankruptcy that comes to mind, when most people think of “Bankruptcy”. Many people consider bankruptcy as an “easy way out” or a way to free themselves from their debt. Depending on the situation, there can be many factors that make bankruptcy more of a hassle than their current situation. Before you make a decision, you’ll want to weigh the pros and cons of filing bankruptcy, below.

What Is Chapter 7 Bankruptcy?

Even though it’s considered one of the most common forms of bankruptcy, many people do not understand the process of filing Chapter 7 Bankruptcy. To put it briefly, the debtor files a bankruptcy petition with the bankruptcy court in his or her area, when the petition is granted, an experienced bankruptcy attorney or trustee is appointed to oversee your case. Your attorney will then take whatever assets you currently own, sell them, then distribute this money to creditors you may owe that have filed proper claims. To help you keep your financial slate clean, you are allowed to keep some of your assets.Chapter 7 Bankruptcy

The Pros of Chapter 7 Bankruptcy

While some people may fear the negative light a bankruptcy puts on your record, it may still be the better option than keeping long term debt. This is just one of the reasons why filing Chapter 7 bankruptcy in Naples, Florida may actually help you in the future. More Pros include:

  • The process takes only 3-6 months. Years of defaulted and missed payments, as well as, repossessions, may actually hurt your credit more then filing for bankruptcy in the long run.
  • Many states allow most of your belongings to be exempt from bankruptcy.
  • You get to keep the wages and salary you earn after you file.
  • Filing will help to alleviate other financial obligations, excluding child support and alimony.
  • There is no threshold of debt requirement to file a Chapter 7.

The Cons of Chapter 7 Bankruptcy

If you’re considering filing Chapter 7 bankruptcy, make sure to weigh the cons, as well. Some cons that can occur when you file, include:

  • Filing severely damages your credit and can stay on your record for up to 10 years (some creditors will offer help after three years, but at higher interest rates).
  • You may lose property you own, for younger people this could be minimal, however, the older you are the more things you may own, meaning you may lose more of your possessions.
  • You will lose all your credit cards
  • After you file, you will not be able to file a Chapter 7 Bankruptcy for another six years.
  • Bankruptcy doesn’t get rid of your student loan debt
  • Getting a mortgage after filing, is nearly impossible.Chapter 7 Bankruptcy

Deciding to file for any type of bankruptcy is a big decision and should not be taken lightly. Before petitioning for Chapter 7 Bankruptcy, discuss your options with an experienced bankruptcy lawyer near you in Naples, Florida. They can help to explain the complicated process of bankruptcy and determine if filing is the best option for your individual situation. Making an informed decision with attorneys you can trust is always the best course of action.