Deciding whether to file for bankruptcy protection is a difficult decision. There are numerous factors that must be considered and it is important for you to understand all the pros and cons of a Chapter 7 or Chapter 13 case. Although no two cases are the same, below are a few things you should be aware of before filing your bankruptcy petition.
The Good When Filing Bankruptcy
- All, or almost all, of your debts will be eliminated (discharged)
- All collection activity (harassing calls, lawsuits, garnishments, etc.) against you will immediately stop
- Bankruptcy is the most comprehensive means for dealing with your debt because all of your creditors are included
- Depending on what chapter of bankruptcy file, you probably will be allowed to keep all of your assets
- If you file a repayment plan, you can make your payments over a period of three to five years
- You may be allowed to remove or “strip” inferior liens from your home
- You emerge from bankruptcy with a fresh financial start and you can immediately begin rebuilding your credit score
The Bad When Filing Bankruptcy
- Until you have had time to rebuild your credit and improve your credit score, you may have a difficult time qualifying for a mortgage or other loan after bankruptcy
- You will need to learn from your financial mistakes because you cannot file another bankruptcy for several years
- There is a small risk the trustee will seize your non-exempt assets to pay creditors
The Ugly When Filing Bankruptcy
- Filing for bankruptcy protection will negatively impact your credit score, but in most cases, the debtor’s credit is already damaged by past due payments, lawsuits and other negative financial events
The above is a very brief outline of the consequences of filing for bankruptcy protection. Let us review your individual circumstances and provide you with an honest assessment of how filing a Chapter 7 or Chapter 13 would impact you.
Speak with an experienced Bankruptcy Lawyer at Faro & Crowder, PA
The information on this blog or any blog is not intended as, and should not be taken as, legal advice.