Understanding both sides of filing Chapter 7 bankruptcy
Filing for bankruptcy protection can provide consumers in Atlanta with an enormous sense of relief. It can wipe out debt, make it easier to pay bills and put a stop to the harassing and distressing stream of calls from debt collection agencies.
These are all certainly upsides of pursuing bankruptcy as a way to deal with unmanageable debt. However, it is important to note that considering or pursuing this option should not be done lightly. People must recognize that there are some drawbacks that come with bankruptcy filings; failing to also take these into account when considering your options could end up working against you.
Declaring bankruptcy will have an impact on your short-term and long-term financial situation, particularly if you file Chapter 7 bankruptcy.
In the short-term, declaring bankruptcy will typically mean that you will lose your credit cards and many assets, excluding your car and home in many cases. It can be extremely difficult to get a mortgage or other type of loan after declaring bankruptcy, so it will be important to have a handle on your immediate living situation. Additionally, because bankruptcy will generally not discharge debts from student loans, alimony or child support, there will still be bills that have to be paid.
The long-term impact of declaring bankruptcy may not seem as harsh or immediate as the short-term impact, but it can be significant. A bankruptcy can negatively affect your credit score for as long as 10 years after filing. If you file Chapter 7 bankruptcy, you will not be able to do so again for six years, even if there is a disaster.
However, just like there are short-term and long-term drawbacks of pursuing Chapter 7 bankruptcy, there can also be short-term and long-term benefits. Every situation is different so it can be crucial to discuss your individual financial circumstances with an attorney in order to determine if Chapter 7 bankruptcy may be a good idea or if another option for debt relief may be more appropriate.
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