Obtaining a legal representative is a crucial step of taking any sort of legal action. From injury lawyers to divorce lawyers, each attorney specializes in a certain area of the law. For financial matters such as filing for bankruptcy, obtaining a proper legal representative is highly recommended to ensure you’re getting what you deserve.
Filing for Chapter 7 bankruptcy is a complicated matter. There are many pros and cons to consider, all of which can be best understood after obtaining a legal representative. With an attorney, the success rate for Chapter 7 bankruptcy claims is around 95%. But is filing for Chapter 7 bankruptcy the right move for you? Here are some aspects to consider.
First, according to bankruptcy.findlaw.com, filing for Chapter 7 bankruptcy will drastically lower your credit score for the foreseeable future. It can remain on your credit report for up to 10 years. You may also lose some of your luxury possessions, depending on if they’re exempt from sale by the bankruptcy trustee. You will also lose all your credit cards, and it will be almost impossible to get a mortgage.
While filing for Chapter 7 has quite a few negative repercussions, there are also a number of positives to consider. You can break away from most types of debt, and you can keep the wages you earn and the property you buy after you file for Chapter 7. Also, within one to three years you should be able to receive a new line of credit, although there will be much higher interest rates. Filing for Chapter 7 bankruptcy can alleviate many of your other financial responsibilities.
Overall, filing for Chapter 7 bankruptcy isn’t just a ‘get out of jail free’ type of situation. Your student loans and alimony will never be alleviated, and your credit will be ruined for the next several years. However, it’s also not the end of the world. There are lenders that loan money to ‘bad risks,’ so there’s a good chance you’ll be able to get an emergency loan if the need should ever arise.
Filing for Chapter 7 bankruptcy is certainly a big decision, but the end goal is ultimately to realign your finances in such a way that makes repayment feasible.