What You Should Know About Filing For Chapter 7 Bankruptcy From A Hobart Bankruptcy Attorney
Deciding whether or not to file for bankruptcy is a huge decision. There can be a lot of benefits to declaring bankruptcy, such as the discharge of all or a majority of your debts and putting a stop to debt collector harassment. But there can also be consequences too, such as a negative impact on your credit score and the record of your bankruptcy declaration following you around for several years to a decade. The negative consequences of filing for bankruptcy tend to have a long-term effect on your life.
What Are Some of The Benefits of Filing for Chapter 7 Bankruptcy?
There are a lot of benefits that result from filing for Chapter 7 bankruptcy, which can make Chapter 7 bankruptcy seem like an attractive debt reduction solution. A few of the benefits people enjoy from filing for Chapter 7 bankruptcy include:
- Getting to discharge a majority – if not all – of their debts.
- Instantly putting a stop to debt collector action by way of an automatic stay that occurs the minute you file for Chapter 7 bankruptcy.
- Many of your most important personal asset, such as a certain amount of value in your home or college tuition savings accounts, often qualify for a bankruptcy exemption, meaning that these assets are shielded from liquidation during bankruptcy proceedings.
- A fresh start for rebuilding your credit.
What About the Potential Consequences Of Filing for Chapter 7 Bankruptcy?
Like most things, there are some negative aspects to filing for Chapter 7 bankruptcy as well. Some of the more challenging consequences of filing for Chapter 7 bankruptcy include:
- Not all debts are dischargeable through Chapter 7 bankruptcy, so even if you file for Chapter 7 you may end up still responsible for certain debts that you cannot discharge, e.g., student loans.
- Filing for Chapter 7 bankruptcy will cause your credit score to go down, and will make creditors more hesitant to provide you with credit in the future, making things like getting a mortgage or a new credit card particularly difficult.
- Your Chapter 7 bankruptcy filing can stay on your credit report for up to a decade.
- Assets that are not exempt from bankruptcy will be liquidated in order to repay as much of your debts as possible.
- If you file for bankruptcy you will be barred from filing for Chapter 7 or Chapter 13 bankruptcy for a certain amount of time in the future.
Each individual who is considering filing for Chapter 7 bankruptcy needs to carefully weigh the pros and cons associated with declaring bankruptcy. While there are plenty of good reasons for filing for Chapter 7 bankruptcy, there are also numerous potential consequences. Each individual’s situation is unique, so you will need to consider these factors in light of your particular circumstances.
Lawyers Who Care About Your Bankruptcy Proceeding
Weighing the pros and cons of filing for Chapter 7 bankruptcy can be an immense and overwhelming undertaking. If you are concerned about whether or not Chapter 7 bankruptcy is right for you, you should consult with a Hobart, Indiana bankruptcy lawyer as soon as possible. The Chapter 7 bankruptcy attorneys at the Law Office of Kevin M. Schmidt, P.C. understand what a tough choice you have to make. That is why we are ready and available to help you with your Chapter 7 bankruptcy proceeding.