Your finances are in shambles, you’re struggling to dig yourself out of debt and you’re beginning to wonder if your situation will ever stabilize in the future. When faced with such dire circumstances, it’s imperative to keep your options open with the hope of finding a solution sooner rather than later.
With so many benefits of Chapter 7 bankruptcy, it never hurts to learn more about the process, what it entails and how it can change your life for the better.
The primary benefit of Chapter 7 bankruptcy is the opportunity to discharge many of your debts, thus giving you a fresh start. However, before you go down this path in Lafayette, you should also learn more about the potential consequences, as this allows you to make an informed decision.
- You may lose some of your assets: Assets that are not exempt, such as motor vehicles, are often sold by the trustee to repay your creditors. It’s important that you’re okay with the idea of potentially losing some of your assets.
- It doesn’t address all types of debt: For example, Chapter 7 bankruptcy doesn’t eliminate student loans, back taxes, child support or alimony payments. You’re still responsible for all these things before, during and after your filing.
- Red mark on your credit report: A Chapter 7 bankruptcy filing will remain on your credit report for 10 years after the filing date. Subsequently, it will also drag down your credit score.
- Long wait until you can file again: Don’t assume that you can file for Chapter 7 bankruptcy as often as you would like, as the law states that you can’t do so again under this chapter for eight years. So, if you once again find yourself in debt, Chapter 7 won’t be able to help.
It’s critical to compare the pros and cons of Chapter 7 bankruptcy before you make a final decision to move forward. There is no denying the benefits, but the potential consequences should also be taken into consideration.
If you decide to proceed, organize the necessary information, create a plan for a better financial future and take steps to protect your legal rights during the bankruptcy process.