Given the current economy, it’s no wonder why so many people are asking this question. If you are facing an overwhelming amount of debt, Chapter 7 may be right for you. However, understanding Chapter 7 can be difficult.
Following are some of the pros and cons of filing for Chapter 7:
Pros
- Fresh start: Depending on your unique situation, you may need a fresh start, and that’s exactly what Chapter 7 does. Also known as liquidation bankruptcy, Chapter 7 discharges your debts and wipes the slate clean.
- Chapter 7 is fast: People facing serious debt need fast relief. Chapter 7 bankruptcy is a relatively quick process that typically takes between three and six months to finish.
- Exemptions are favorable: Florida has numerous exemptions, including the very favorable exemptions for homestead and qualified retirement plans
Cons
- It damages your credit: Most people considering Chapter 7 realize that it will damage their credit. However, what you may not know is that a Chapter 7 filing can stay on your credit report for up to 10 years.
- You could lose property: Properties that are not exempt may be liquidated to pay your creditors back.
- It cannot discharge all debts: Bankruptcy will not discharge alimony, child support, student loans, tax debts and other non-dischargeable debts.
Understanding the bankruptcy process is rarely easy. A skilled attorney can review your situation and recommend the course of action that is best suited for you.