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Pros & Cons of Chapter 7 Bankruptcy Filings

Do you feel like you have lost control of your life due to overwhelming debt? Filing for bankruptcy may be a helpful solution to alleviate that debt. Chapter 7 bankruptcy in particular is well known for discharging vast amounts of debt and clearing the way for a debt-free future.

However, there is bankruptcy process without any risks or downsides. Before you file for Chapter 7 bankruptcy, you should have a clear idea of its pros and cons.

Benefits of Chapter 7 bankruptcy include:

  • Buys time to pay past-due mortgage payments, effectively freezing foreclosure processes.
  • Puts an automatic stay on your assets to block creditors from seizing them.
  • Discharging large amounts of unsecured debt, like credit card debt.
  • Potential to discharge marital debt after a divorce.
  • Allows you to enter the future debt-free and better financially plan from then on.

Disadvantages of Chapter 7 bankruptcy may include:

  • Risking nonexempt personal property and assets, including your home, vehicles, etc.
  • Damage to your credit score when Chapter 7 bankruptcy concludes — this may be repaired over time and with the right guidance.
  • Ineligibility due to “means test,” which can prevent you from using Chapter 7 at all if you make more than the average individual in your state.

Legal Guidance to Understand & Use Chapter 7 Bankruptcy

Filing for Chapter 7 bankruptcy can be a blessing for some, but a problem for others who are not prepared for the process. Some may want to avoid Chapter 7 entirely and use Chapter 13 instead, as it is less likely to jeopardize their assets.

Interested in seeing if Chapter 7 bankruptcy is right for you? Call (704) 750-1324 to connect with Schwilm Law Firm, PLLC and our bankruptcy attorney in Charlotte, North Carolina. We would be happy to discuss the basics of your case during a free consultation. If bankruptcy seems right for you, we can go from there. If not, we can explore alternatives. It is all part of ensuring your total satisfaction as our client!