What Are the Advantages and Disadvantages of Declaring Yourself Bankrupt?
Bankruptcy can bring relief to individuals with financial crisis, but it does have a lot of disadvantages as well! It hampers the credit report; once bankruptcy is filed it remains on the credit report for the next ten years. During this period of time it is difficult to get credit from the banks, even though one gets the credit, the interest level is very high.
Following are some of the advantages and disadvantages of filing a chapter 7 bankruptcy which is among the most commonly filed:
Advantages:
- Debt amount is not specified
- Any wages earned after bankruptcy can be kept by the debtor
- Any unpaid balances due after assets have been distributed are discharged
- Most cases are discharged within 3 to 6 months
Disadvantages:
- The non exempt property is sold by the trustee
- It only temporarily stops foreclosure
- All debts are not discharged.Ex (Child support, taxes, student loan)
- Trouble for the Co-signers
- Once filed, withdrawal is difficult
- Damages credit rating
- Can be filed every six years
Filing bankruptcy offers certain advantages and it may be the right choice however, before deciding to file bankruptcy you should be familiar with the advantages and disadvantages of chapter 7 bankruptcies
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