Every year, numerous Tennessee residents find themselves struggling financially, and every year many of these individuals find themselves looking into what debt relief options they may have. For some, bankruptcy may be what they need to regain control of their economic situations, but what form of bankruptcy? This week, this column will address Chapter 7 and its pros and cons.
What are the advantages to filing Chapter 7? Most people talk about the negative aspects of this form of bankruptcy and why it should be avoided. The truth is, it does have its benefits, some of them being:
- Stops creditor harassment
- Quick debt relief
- Debt discharge, no repayment plan
- Allowed to keep certain property
- Ability to start rebuilding credit within a few years
What are the disadvantages of pursuing this form of bankruptcy? First, some property may have to be returned to creditors or sold to pay off one’s debts — this is why Chapter 7 bankruptcy is often referred to as liquidation bankruptcy. Second, the filing will be placed on one’s credit report and will remain there for nearly 10 years. Finally, all forms of credit may be taken away.
When choosing whether to file Chapter 7 bankruptcy, it is necessary to look at the big picture. Yes, there are pros and cons to pursuing this type of debt relief, but does the good outweigh the bad. If the answer is yes, it may be worth doing. Legal counsel can help Tennessee residents who are on the fence about pursuing bankruptcy filings make the right decision for their specific situations.