Advantages & Disadvantages of Filing Bankruptcy

If you are considering filing for Chapter 7 or Chapter 13, it is important to understand all of the consequences. No two filings are the same, so it is important to discuss your individual financial situation with a knowledgeable lawyer before filing. For general guidance, below are a few of the pros and cons of seeking bankruptcy protection:

Pros of bankruptcy:

  • Most, if not all, of your debts will be eliminated.
  • All collection efforts against you will stop, including collection telephone calls, garnishments, and lawsuits.
  • You may be allowed to keep most or all of your assets.
  • You may be able to remove inferior liens from your home.
  • You can obtain a fresh financial start, relieving the burden of your overwhelming debt.

Cons of bankruptcy:

  • Your credit score will be damaged. However, many debtors already have a low credit score due to past due payments, so the impact of filing for bankruptcy is negligible.
  • Depending on what chapter you file and your unique circumstances, there is a small risk of losing some of your assets.
  • You are not allowed to file another bankruptcy case for 8 years for a Chapter 7 and 4 years for a Chapter 13.

To learn more about filing for bankruptcy protection, contact The Koplen Law Firm.