If you're trying to decide whether or not to file for bankruptcy in Pennsylvania, it's important to sit down and go over a list of pros and cons first. This can help you make an informed decision and make the right choice for your financial future.
The most obvious pro of Chapter 7 is that a lot of your debt could be forgiven. You won't have to pay it back in the future.
On top of that, an automatic stay can be used to protect you from certain actions. For example, if the bank is trying to foreclose on your home, the stay pauses that action until the bankruptcy case is complete.
Finally, bankruptcy can give you a clean slate so that you can start over, from a financial perspective, without past mistakes making it impossible for you to make any progress.
There are a few cons to consider, including the fact that your assets are going to be liquidated if you choose Chapter 7. This could mean that you'll lose things you'd like to keep, though there are exceptions for things like your home, your car, and other necessities.
Another con is that filing can lower your credit score. After you file, it may be harder for you to get a loan in the future. However, it is worth noting that it could also be very hard—or impossible—to get another loan if you were still over your head in debt, so it may not be that different than filing.
If you do decide to file for Chapter 7 bankruptcy, be sure you know what legal steps to take.
Source: Quick and Dirty Tips, "Should You File Bankruptcy?," Laura Adams, accessed Dec. 31, 2015