What are the pros and cons of a chapter 7 bankruptcy?
Pros of a Chapter 7 Bankruptcy
- Immediate relief from creditos because of an automatic stay on all collection activities
- Permanent relief from unsecured debt if you are granted a discharge
- A foreclosure of your home or repossession of other assets will be delayed when you file a petition
- You may be able to keep your home, a car and other personal possessions depending on the value
- The calls and letters from debt collectors will stop
- The process is usually quick, taking an average of 3-5 months
Cons of a Chapter 7 Bankruptcy
- Your credit score will be negatively affected for up to 10 years
- You may lose some of your assets if an exemption doesn't apply
- Certain debts will not be discharged, including some taxes, student loans, alimony and child support
- You have to explain how you accumulated your debt to a bankruptcy trustee
- If you make too much money or have too much disposable income, you may not pass the "means test" that is required for relief under Chapter 7
- If you have joint debts with your spouse or someone else, he or she will remain responsible for the debts
This law firm is a debt relief agency. We help people in Connecticut file for relief under the Bankruptcy Code.