The good and the bad of Chapter 7 bankruptcy

On behalf of Furr & Cohen, P.A. posted in chapter 7 on Thursday, June 2, 2016.

If you are in financial turmoil and every phone call from an unrecognized number puts additional weight on your shoulders or darkens the shadow from the perpetually drifting storm cloud above, you may need outside help. Particularly if you don’t have answers, and you don’t expect a financial change that will allow you to pay off the debts you owe, you may be an ideal candidate for filing bankruptcy.

Chapter 7 bankruptcy may drastically relieve the emotional and sometimes physical strain that comes from the weight of a significant financial burden. How do you determine whether or not it is the right choice for you? In a nutshell, what will you lose and what do you have to gain? To look at some of the drawbacks that deserve the most weight in decision-making, a Chapter 7 bankruptcy means you could lose:

  • Your good credit score.
  • Your credit cards.
  • Your house, car and other property, if there is any substantial equity to be garnered by the sale.
  • Your ability to buy a new house.

This may seem like a lot of loss, but it must be weighed and considered with the gains. For instance, you will be able to keep your income once the bankruptcy has been filed. So now debts are relieved, freeing up income to make other purchases, purchases you may do as cash only without payments or with companies set out to help rebuild credit, given at higher interest rates. Also, keep in mind that your property may be exempt from sale in your bankruptcy if you owe more than it is worth, or if the amount of equity is below a certain threshold. However, if you are keeping a vehicle or home, it will still be your responsibility to continue making on-time payments.

If you need relief from debts, and you don’t know what options you have, a Florida bankruptcy attorney may be able to sit with you and review your circumstances and all of your options, taking the time to help you make a decision that could effectively change your life for the better.