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.