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Klenk Law

The Advantages and Disadvantages of Filing Chapter 7 Bankruptcy

Posted on Sat Aug 22, 2020, on Estate Planning

When you’re in debt, you may feel as though you are never going to get out from under it. You might feel like you are working paycheck after paycheck just to try to put a dent in your credit card or medical bills. If you feel like that, you aren’t out of options. Chapter 7 bankruptcy is an option to clear your debts and to start fresh. Let’s talk about The Advantages and Disadvantages of Filing Chapter 7 Bankruptcy.

The Advantages and Disadvantages of Filing Chapter 7 Bankruptcy?

When you file Chapter 7 bankruptcy, all the harassing phone calls from creditors should stop. The entire process lasts about three to six months and most of your debts can be cleared. The debts that cannot be cleared, however, include student loans and child support. When you work with a bankruptcy lawyer in Cypress, TX, he or she will be able to inform you of what types of debts you have to include and which ones cannot be alleviated in bankruptcy. Now, if you are behind on other financial obligations, such as child support, you can still ask the court to suspend your obligations while you go through the process of bankruptcy.

Once in the process of bankruptcy, you no longer have to worry about creditors aggressively trying to collect money from you. A collections agency cannot take you to a court or sue you over the debt. In the end, you will have to give up your credit cards, but you will no longer owe money on those accounts.

What Are the Disadvantages of Chapter 7 Bankruptcy?

Bankruptcy does have a few downsides, of course. For instance, if you file for Chapter 7 bankruptcy, it will stay on your credit report for 10 years. Also, it will drop your credit score. The higher your credit score, the more significant the drop will be. If you’re worried about the hit to your credit, keep in mind that you can rebuild your credit relatively quickly. In six months to a year, you could have a relatively good score again. Also, if anything else were to happen and you were to struggle to pay debts again, you cannot file for bankruptcy more than once within the last six years.

Sometimes debt can pile on too high. If you find yourself struggling financially or unable to pay your bills throughout the month because of the debt, then Chapter 7 bankruptcy might be the best option available to you. Talk with a bankruptcy lawyer, like Winfrey Law Firm, as soon as possible about how bankruptcy can be a relief when you’re in over your head. The Advantages and Disadvantages of Filing Chapter 7 Bankruptcy

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