When it comes to bankruptcy, most people prefer Chapter 7, as it lets you get rid of all your debts without losing any assets. Moreover, the discharge is also guaranteed within a relatively smaller time frame (3-6 months) compared to Chapter 13 bankruptcy (3-5 years). However, despite the numerous benefits associated with it, it is important to weigh in the losses due to this bankruptcy chapter before deciding to pursue it further. Los Angeles based bankruptcy law firm Recovery Law Group lawyers advise that being aware of the pros and cons is important to avoid disappointment later in life. According to them, the major drawbacks of this bankruptcy chapter are:
- You might end up losing some or all your non-exempt property which is liquidated to pay your unsecured creditors.
- There are certain loans that will survive the Chapter 7 bankruptcy. These include child support and alimony, student loan debt, certain taxes, etc. If these constitute the major chunk of your debts, your filing for bankruptcy and getting a discharge won’t be of much help.
- The biggest disadvantage of Chapter 7 bankruptcy is that it remains on your credit report for a duration of 10 years! This can be a huge disadvantage if you are looking for fresh credit like a mortgage or even a new job.
Though the advantages of Chapter 7 bankruptcy may probably outweigh these points, it is important to be aware of what you are getting into. If you feel your financial situation will improve after filing for Chapter 7 bankruptcy Los Angeles, you should go ahead with it. An experienced bankruptcy lawyer can help make things clear for you. In case you need a consult with one, you can call 888-297-6023.