Bankruptcy isn’t an easy choice.
However, with lenders and creditors at the door, it might be your only option. But it’s a chance to rebuild, and a chance to get a fresh start. Let’s take some time to consider – albeit briefly – some of the pros and cons of chapter 7 bankruptcy, presented by Reganyan Law Firm – your professional bankruptcy lawyer:
First, the pros of filing chapter 7 bankruptcy:
- Bankruptcy is common: Don’t be embarrassed by bankruptcy. Bankruptcy is quite common, and frankly the best option in numerous cases. Businesses fail, credit cards compile and spiral as interest rises. It’s easy to fall victim to loan pile-ups. Even Donald Trump has filed bankruptcy.
- Debt relief: A chapter 7 filing relieves you of your responsibility to pay most debts and creditors.
- Property exemption. Bankruptcy means you’ll lose some of your valued property. However, many belongings are exempt from repossession.
- Loss of credit cards: This one’s good and bad! You’ll no longer have access to credit accounts for the time being, but you’ll have no worries about piling on further debts. You’ll rely on your savings making it hard to sink into the red.
- Lending: There are still lenders out there who’ll finance some mortgages and loans. It is possible to begin rebuilding equity. We encourage the recently bankrupt to take steps towards building equity and savings.
- Credit: Simply put, the sooner you file bankruptcy, the sooner you can rebuild credit. Your credit can be destroyed for the better part of a decade – so if bankruptcy is the only option, start now!
Alright, now the cons:
- Credit: Bankruptcy does destroy your credit, and may take up to ten years to resolve.
- Property: Valuable property may be repossessed in order to compensate debtors and creditors.
- Loss of credit cards: We’ve talked about this above – but you’ll lose access to crediting accounts.
- Mortgage: Mortgages will be hard to come by, and owning a house could be difficult for some time.
- State of Mind: Often, creditors and lenders will badger the indebted. Being in debt is stressful, and letters, calls, and door-knocks can be intimidating! Bankruptcy gives you state of mind, and collection letters, calls, and impromptu door knocks will stop!
- Six Year Filing: Bankruptcy may only be filed every six years. This encourages those who recently filed bankruptcy to keep their head above water!
- Student Loans: Bankruptcy does not relieve you of your obligation to repay student loans. Student loans are unique in this way.
- Alimony/Child Support: You will not be relieved of any obligation to pay alimony or child support if you already have such an obligation.
- Certain Debts: Mortgage liens and other specific debts may not be relieved – as will be determined by a court or a judge.
Remember to call on Reganyan Law Firm for as your professional chapter 7 bankruptcy lawyer. If you’re curious about declaring bankruptcy, or if you’ve got other questions concerning legal representation, give us a call or drop us a line!