While there are definite benefits of filing for Chapter 7 bankruptcy, there are also a few reasons why this may not be the best idea. You have to weigh the pros and cons before you make a final decision.
If you want to be confident in your decision to file, you should first learn more about any potential drawbacks. At the very least, these will help you understand what to expect should you move forward with the process.
Here are just a few of the reasons why you may want to think twice about Chapter 7:
- It will ruin your credit for quite a few years. Did you know that a Chapter 7 filing can remain on your credit report for as long as 10 years?
- You can lose nonexempt property. This is something you need to strongly consider, especially if there is property you are not comfortable losing during a bankruptcy filing.
- You will lose all your credit cards.
- Filing for bankruptcy makes it difficult to apply for a mortgage or car loan in the future. It will be several years before you are able to do so again.
- Chapter 7 bankruptcy does not eliminate student loan debt or your obligation to pay alimony and child support.
These reasons may not be enough for you to avoid Chapter 7 bankruptcy. After all, there are a variety of benefits that can work in your favor.
Here is what you need to do: make a list of pros and cons as they pertain to your particular situation. From there, decide once and for all if Chapter 7 could bring any good to your life.
Nobody can answer the question of whether or not you should file for Chapter 7 bankruptcy. If you want to learn more, if you have questions, we are here to help you every step of the way.