When times are very hard and finances are even tougher to sort out, there is one word that brings a bitter yet hopeful taste to the tongue. Rarely spoken of and often misunderstood, bankruptcy is a topic that many Americans choose to avoid.
Chapter 7 bankruptcy is believed to be one of the “most penalizing types of debt settlement” by many of our clients.
But does this form of debt relief deserve harsh its criticism? Are there actually positive outcomes that far outweigh that of any other solution available? Learn what our highly skilled credit counselors of Out of Debt 4 Good have to say about this uncomfortable subject. Here are some of the pros and cons of Chapter 7 bankruptcy we have compiled.
Pros of Chapter 7 Bankruptcy
- One of the primary reasons why debtors are choosing this process is because it offers an immediate resolve for your debt concerns and the procedure will immediately be over. However, the after result of this process will stick to your credit report for at least 10 years. The estimated time in finishing the paperwork and documenting for filing a chapter 7 bankruptcies usually takes 7 months. Other debt settlement program can take up to 7 years.
- In spite of the fact that chapter 7 bankruptcy procedures sound correctional, most states permit account holders to get a hold of those things. Subsequently, if organized accurately, an indebted person can pick up exclusions from chapter 7 procedures for a lot of their benefits – making the procedure more helpful and less difficult.
- Even if the chapter 7 bankruptcy will stay on your credit report for many years, this is only the concern of the middle-aged person. Those who are young does not necessarily mind it. Also, there are other ways on how you can gain credit as different lending agencies have different standards even for people who are marked as a risk. Opting for a chapter 7 also means that your creditors do not have an access for any types of payment that you will receive.
- Declaring bankruptcy chapter 7 allows you to rebuild your credit much sooner. Chapter 7 bankruptcy can only be declared once every 6 years so in case that another disaster will come your way, you can always use chapter 13.
- In case that you do not owe cash on different types of debt, the amount of debt that can be settled should be unlimited.
Cons of Chapter 7 Bankruptcy
- Chapter 7 Bankruptcy will not shoulder any types of alimony or child support. In fact, no type of debt settlement program is willing to shoulder your debts to pay for your child support and alimony or even a student loan.
- You need to explain to the presiding judge your story on how you ended up on this mess. Yet, do not be afraid to explain it to them. Trust me; there are far worse cases than yours.
If you are wondering, “Is bankruptcy for me?” consider the good along with the bad of Chapter 7 bankruptcy. Developing a good understanding of what’s to come will help you decide whether this is a good option for you. It is important to remember that everyone’s circumstances are different. Your unique financial situation may or may not be suitable for bankruptcy. When in doubt, do not hesitate to contact one of our Credit Counselors or Financial Advisor’s for assistance with your final decision.