It's not easy to make the choice to file for bankruptcy. Even if you are struggling with overwhelming debt, you may wonder how taking this step could impact your future and your financial interests. This is a serious choice, and you would be wise to carefully consider all of your options before you move forward.
Chapter 7 bankruptcy is a popular choice for individuals who have a significant amount of unsecured debt. There are many advantages to this popular option for consumer bankruptcy, but it's smart to know exactly what to expect from this process and if there are any drawbacks for you before you file. For many applicants, Chapter 7 offers a way to a better financial future.
What are the benefits?
One of the most significant benefits of filing for Chapter 7 bankruptcy is the fact that it will halt all contact from creditors and debt collectors. The automatic stay will go into effect as soon as you file, giving you time to focus on your bankruptcy plan. Some of the other advantages of this process include the following:
- Chapter 7 bankruptcy typically only takes about three to five months to complete.
- There are exemptions available that will allow you to keep most of your personal property.
- Chapter 7 allows for the discharge of many types of unsecured debt, such as credit card debt and medical debt.
Every financial situation is different, and you may want to learn more about the specific benefits this process can offer you based on your individual circumstances.
Are there drawbacks?
Chapter 7 is not always the most beneficial choice in every situation. Some of the potential drawbacks of this choice may include:
- Filing for Chapter 7 will impact your credit score for an extended period of time.
- Bankruptcy cannot discharge your student loan debt.
- Chapter 7 bankruptcy will likely mean the loss of some of your non-exempt assets and personal property.
Due to the serious nature of making this type of choice, you would be wise to carefully consider all of your options before you move forward. Depending on your circumstances, Chapter 7 could be the right way for you to deal with your debt, put a stop to creditor harassment and look forward to a better financial future. It may be helpful to discuss your case with an experienced New Jersey bankruptcy attorney to learn if this is the most prudent option for your situation.