Filing for bankruptcy is few debtors' first solution to mounting debts. But it can be a good way to resolve your fiscal woes once other methods have been tried but failed.
So how do you know whether it's the right choice for you? One good way is to draw up a list of the pros and cons of filing for Chapter 7 bankruptcy. Let's start with the pros.
- It's a quick process, usually no longer than three to six months from filing to discharge of debts.
- Most of your assets will be exempt from seizure and sale unless you have luxury items.
- Almost immediately after your debts are discharged in a bankruptcy, you will receive additional offers of credit. Be careful here, as the interest rates are quite high.
- The slate is wiped clean (for most debts).
Now, let's take a look at the cons of filing for Chapter 7 bankruptcy.
- The filing remains on your credit record for up to a decade.
- Any luxury possessions you have could be taken and sold off to satisfy your creditors.
- Some people still view bankruptcy as a stigmatized option.
- You lose all your credit cards.
- You will still have student loan debt and child support arrearages to pay (among other things).
- You must explain to the court and the trustee what led to your complete insolvency and the inability to pay your debts.
It can be difficult to determine whether bankruptcy is the right option for you, and if so, which is the correct chapter to file. A Medina bankruptcy law attorney can review your circumstances and recommend the best path for you to free yourself from your debts.