Pros and Cons of Chapter 7 Bankruptcy
You're in debt. You have considered all of the options: debt settlement, debt management, debt relief, debt negotiation, etc. However, either none have worked or many don't fit your particular situation. So, where do you turn? In "last resort" situations, bankruptcy could be an option. Within bankruptcy, there are two main options: Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.
In this particular case, the Pros and Cons of Chapter 7 Bankruptcy will be reviewed. In fact, Chapter 7 Bankruptcy could be a better option for many people when compared to Chapter 13 Bankruptcy.
With Ch 7 Bankruptcy, in order to pay off your creditors, you must sell your excess wealth. This would mean selling off any luxury items you might have or other unprotected items. The good news with Ch 7 Bankruptcy is that a majority of your most important possessions (i.e. your house, your car, etc.) would be protected. So, if you don't have a lot of excess wealth and luxury items, you could get off easy, relatively speaking. A majority of your debts would be cleared, with the exception of student loans and alimony payments. However, student loans and those types of debts wouldn't be cleared with any type of bankruptcy.
Another substantial benefit to Chapter 7 Bankruptcy involves the quick process. The Chapter 7 Bankruptcy declaration process is often complete within 6 months, compared to years with Chapter 13 Bankruptcy.
Also, once you declare bankruptcy, your creditors won't be able to contact you.
Like most things in the world, there are a few drawbacks. Declaring Bankruptcy means it will be on your credit report for ten years, which makes it harder to get a mortgage. Also, you won't be able to declare bankruptcy again for six years. So, you must be careful after your debts have been cleared to avoid getting into a similar position.
To review:
Pros:
Cons:
If you're rethinking Bankruptcy, check out the Pros and Cons of Debt Settlement to see if that could be an option.
Also, be sure to review the Debt Forums [http://debtorsunite.com/Forums.aspx] for additional advice and assistance.
In this particular case, the Pros and Cons of Chapter 7 Bankruptcy will be reviewed. In fact, Chapter 7 Bankruptcy could be a better option for many people when compared to Chapter 13 Bankruptcy.
With Ch 7 Bankruptcy, in order to pay off your creditors, you must sell your excess wealth. This would mean selling off any luxury items you might have or other unprotected items. The good news with Ch 7 Bankruptcy is that a majority of your most important possessions (i.e. your house, your car, etc.) would be protected. So, if you don't have a lot of excess wealth and luxury items, you could get off easy, relatively speaking. A majority of your debts would be cleared, with the exception of student loans and alimony payments. However, student loans and those types of debts wouldn't be cleared with any type of bankruptcy.
Another substantial benefit to Chapter 7 Bankruptcy involves the quick process. The Chapter 7 Bankruptcy declaration process is often complete within 6 months, compared to years with Chapter 13 Bankruptcy.
Also, once you declare bankruptcy, your creditors won't be able to contact you.
Like most things in the world, there are a few drawbacks. Declaring Bankruptcy means it will be on your credit report for ten years, which makes it harder to get a mortgage. Also, you won't be able to declare bankruptcy again for six years. So, you must be careful after your debts have been cleared to avoid getting into a similar position.
To review:
Pros:
- Keep your most important possessions
- Quick Process
- No more contact from creditors
Cons:
- On your credit report for 10 years
- Difficult to get a mortgage/loans during the 10 year period
- Can't declare again for 6 years
If you're rethinking Bankruptcy, check out the Pros and Cons of Debt Settlement to see if that could be an option.
Also, be sure to review the Debt Forums [http://debtorsunite.com/Forums.aspx] for additional advice and assistance.
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