If you are having severe financial problems, constantly receiving calls and letters from your creditors and/or threats of having your car repossessed and/or mortgage foreclosure, you may want to consider filing either Chapter 7 or Chapter 13 Bankruptcy.
Below is a brief list of some PROS for filing bankruptcy.
|Under Chapter 7, the trade-off for having ruined credit for a while is a mark against your credit in exchange for freedom from most debt for a time. In addition, bankruptcy may be easier to explain to a future lender than repossessions, default judgements missed and late payments.|
|Depending on the state, property you need may be exempt from sale by the bankruptcy trustee. In addition, you will get to keep the salary or wages you earn and the property you buy after you file for Chapter 7.|
|More than likely, your credit cards are what got you in this predicament to begin with, so it may not necessarily be a bad thing that you will no longer be able to use them. You may be able to obtain new credit lines within 1-3 years of filing bankruptcy; although it may be at a much higher interest rate.|
|There are mortgage lenders specializing in lending “bad risk” clients, so it may still be a possibility to get a mortgage, but at a higher interest rate.|
|If you don’t owe money on the type of debts that survive bankruptcy, the amount and number of debts that a bankruptcy court can relieve you from paying is potentially unlimited. Additionally, Chapter 7 is very short filing period; therefore you can get a financial fresh start relatively quickly. It takes approximately 4 months from the time that you file until you receive your discharge of debt.|
|If you obtained a Chapter 13 discharge in good faith after paying off at least 70% of your unsecured debts, the six-year bar (You cannot file for Chapter 7 bankruptcy if you previously went through bankruptcy proceedings under Chapter 7 or Chapter 13 within the last six years) does not apply.|
What about student loans, child support and alimony?
Only an order from family court, can relieve you of your obligations to child support/and or alimony. In addition, bankruptcy will not rid you of student loan debt, however, in the case of student loans; filing bankruptcy will prevent your lenders from aggressive collection action.
As this can be a life altering event, an experienced bankruptcy attorney should explain and review all of the pros and cons of filing in more detail to you, along with any options and alternatives, including debt negotiation. For those contemplating bankruptcy in the state of Pennsylvania may contact our office 610-530-9285.
Please note: The hiring of an attorney is an important decision that should not be based solely on advertisements. Further, prior results do not guarantee a similar outcome. The laws change. Each case is different. This blog and website is designed for general information only. The information presented on this site is neither formal legal advice nor the formation of a lawyer/client relationship.