As someone who has lost your job, the world may feel like it’s falling down around you. It might be hard to make ends meet, and you could be considering bankruptcy.
Before you go forward with a bankruptcy, you should consider the pros and cons of doing so. A bankruptcy, in the right circumstances, can change your life for the better, but it does have some downsides to consider before you decide it’s right for you.
What are some disadvantages of Chapter 7 bankruptcy?
One disadvantage is that it will ruin your credit for some time into the future. Chapter 7 bankruptcies can remain on your credit for up to 10 years. You may also lose assets that you own. There are exemptions, but some luxury assets may have to be sold in a liquidation bankruptcy.
What are the positives of a Chapter 7 bankruptcy?
One of the major positives is that your unsecured debts will be able to be discharged completely in most cases. That means that you can start fresh. While you can’t discharge taxes or student loans in most cases, credit card debt and other similar debts can be discharged. Chapter 7 bankruptcy also stops creditors from calling you and trying to collect the debt.
You only get to file for Chapter 7 bankruptcy once every six years, so if you decide to do so, you need to make sure it’s the right time. Your attorney can talk to you more about bankruptcy and if this is the right option to pursue based on your financial situation.