With a variety of benefits, it’s easy to assume that Chapter 7 bankruptcy is exactly what you need to put your financial mistakes in the past and live a better life in the future.
While some consumers find that the benefits of Chapter 7 bankruptcy outweigh the potential drawbacks, you don’t want to assume this will be the case. Instead, you need to do your homework to ensure you are making a confident decision.
Her are several potential drawbacks of Chapter 7 bankruptcy:
- It will remain on your credit report for 10 years, thus making it a challenge to secure a loan
- It’s possible that you could lose property that is not exempt
- A Chapter 7 bankruptcy filing doesn’t have any impact on student loan debt, child support payments or alimony payments
- You will lose your credit cards (which is a good thing for some people)
- If you declare for Chapter 7 bankruptcy now, it’s typically more difficult to do so again in the future
- It’s possible you will still be required to pay some debts after your case is complete, such as a mortgage lien
It’s a good idea to look at both sides of a Chapter 7 bankruptcy filing, as this is the only way you can be 100 percent sure that you are doing the right thing.
If you come to learn that you can benefit from Chapter 7 bankruptcy, you should focus on the process you must follow to get the wheels in motion. There’s a lot to do, but when you know what to expect and how to protect your legal rights, you’ll be much better off.