There are many reasons for a financial crisis such as the loss of a job or a medical emergency. It is typically impossible to predict these life-changing events and the financial damage they cause. When the time comes to remedy this financial damage, many people consider filing a Chapter 7 bankruptcy.
In many cases, this is absolutely the right decision. However, most Massachusetts residents still hesitate to file. It can help your decision if you take some time to look at several of the pros and cons of Chapter 7. Weighing the advantages against the disadvantages can provide you with a clearer picture of what your bankruptcy journey will look like.
Pros of Chapter 7
- Most Chapter 7 bankruptcy cases conclude quickly
- Filing will put a stop to aggressive collection practices from lenders
- You may be able to keep some of your personal possessions
- Chapter 7 is an option regardless of the amount of debt you owe
- You can keep wages, property and other assets acquired after filing
Cons of Chapter 7
- This form of bankruptcy will stay on your credit report for several years
- Chapter 7 makes it exceptionally difficult to get a new mortgage
- This bankruptcy does not cover child support, alimony and student loans
- You risk losing any luxury items you possess
- You will have to let go of all of your credit cards
Deciding if a Chapter 7 bankruptcy is right for you requires careful consideration. It is also helpful to discuss your options with an attorney before you make a decision. In many cases, talking with a lawyer about your financial situation helps you identify the right bankruptcy solution for you and your family.