Chapter 7 Bankruptcy: Pros and Cons

Bankruptcy Process

Filing for bankruptcy can be a big decision and a Salt Lake City bankruptcy attorney can help you through this difficult time. Justin M. Myers does not judge your situation but instead helps you breathe after falling into financial trouble. Bankruptcy can be seen as a shameful last resort for many debtors. It doesn’t have to be. It is a fresh start and a new chapter on your journey. With every decision there are pros and cons. We have found the biggest ones for clients just like you.


Keep future income

In most cases, the property obtained after bankruptcy will not be included in the bankruptcy estate. However, if the property is acquired within 180 days of filing it can be included.

Get a fresh start

The advantage of a Chapter 7 bankruptcy is for the debtor to start anew. You will be free of paying certain debts that are eliminated off your credit. You will essentially start at almost 0 depending on student loans and property you may have. You will be able to rebuild your credit. Debts are typically discharged within 60 to 90 days.

No repayment plan

Unlike other bankruptcy plans, Chapter 7 does not require the debtor to repay any debts. The qualified debts are discharged and the debtor no longer has to worry about them.

The pros sound great! But with every pro there is a con. Each situation is unique and you should speak with an experienced Salt Lake City bankruptcy attorney.


Loss of Credit Cards

Since Chapter 7 bankruptcy essentially wipes out all your debt, that means you will lose all of your credit cards. You may not be able to obtain a new credit card for 1 to 3 years after. Often times, new cards will come with a high interest rate.

Bankruptcy Stays on Credit Report for 10 years

Creditors may be apprehensive to lend to you if they see a bankruptcy on your credit report. Although, you may be relieved of all of your debt within 6 bankruptcy remains on your report. So you may not have any debts to worry about but rebuilding your credit can be difficult.

Student Loan Debt is not removed

Student loan debt can be stifling and many debtors think that it will go away when filing for bankruptcy. That is not true. Student loan debt will not disappear during a Chapter 7 bankruptcy. You will still have to repay that debt.

For many debtors, the pros outweigh the cons. Each case is unique and should be discussed with an experienced Salt Lake City Chapter 7 bankruptcy attorney. Chapter 7 bankruptcy may not be the best option for you, Justin M. Myers can discuss other options specific to your circumstances to determine the best course of action. To schedule your initial consultation, call us today on 1-801-505-9679.

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