If you are considering filing for Chapter 7 bankruptcy, you'll want to compare the pros and cons before pushing forward. Only then will you feel 100 percent confident in your decision and comfortable with what's to come in the near future.
It's natural to be concerned about potential Chapter 7 bankruptcy drawbacks. Fortunately, once you learn more about these, you may find that they don't have nearly as big of an impact on your financial future as you thought.
Five common concerns about the filing for bankruptcy
- Chapter 7 bankruptcy will ruin your credit score: While it will damage your credit score, it will not do so permanently. You can take steps after you file for bankruptcy to boost your score.
- You will lose property: Even though it's possible that you may lose some property in Chapter 7 bankruptcy, there are exemptions that can protect many of the items that are important to you.
- You will have to surrender your credit cards: This may sound like a big deal, but when you get rid of your credit cards, you will not have to worry about them causing more financial harm in the future.
- It's difficult to secure a loan after a bankruptcy filing: This may be true, but just the same as your credit score, it doesn't have to affect you forever. As you rebuild your credit, you may soon find yourself in position to once again buy a car or home.
- It won't relieve you of student loan debt or child support obligations: There is no way around this, but this isn't typically reason enough to avoid a Chapter 7 bankruptcy filing.
Only you know how you feel about your finances and the strategy that is best for getting your life back on track.
If you've yet to compare the pros and cons of Chapter 7 bankruptcy, do so in the near future. Most consumers find that the benefits far outweigh any potential drawbacks.
Once you're on board with the idea that a Chapter 7 bankruptcy filing is the answer, focus on the process itself and the steps you must take to move forward in an efficient manner. The knowledge you collect early on will help you make more informed decisions that benefit your personal finances.