If you find yourself learning more about Chapter 7 bankruptcy, there's a good chance you'll come across information that makes you believe it's the right choice for you at the present time.
While there is nothing wrong with focusing on the many things Chapter 7 bankruptcy can do for you, don't lose sight of the potential disadvantages. These can include the following:
- A Chapter 7 bankruptcy will remain on your credit report for 10 years, making it a challenge to secure a loan (such as to purchase a car or home)
- It's possible that you could lose property, as not everything will be exempt
- You will have to turn your credit cards over
- If you declare Chapter 7 bankruptcy today, it makes it more difficult to do so again in the near future
- Chapter 7 bankruptcy doesn't eliminate all types of debt, such as student loans
- You are unable to file for Chapter 7 bankruptcy if you previously went through the Chapter 7 or Chapter 13 process during the past six years
Deciding for or against Chapter 7 bankruptcy is never easy, as you need to closely compare the pros and cons.
Even though bankruptcy is typically a last resort, you shouldn't assume it's the only thing you can do to improve your finances. It's well worth trying everything else before you go down this path.
If you come to find that Chapter 7 bankruptcy is the best way to get your financial life back on track, don't wait to compare the pros and cons, learn more about the process and do whatever it takes to protect your rights along the way.