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.