Considering Filing for Bankruptcy? Reasons for and Reasons Against Filing
If you are struggling under a mountain of debt and you have been unable to get creditors to work with you, you may be considering a bankruptcy filing. Before you hire an attorney, here are some of the pros and cons of the process, so that you can make an educated decision about how you want to proceed.
The Advantages of a Personal Bankruptcy Filing
One of the principal benefits to seeking protection under Chapter 7 or Chapter 13 bankruptcy is that you get the protection of the automatic stay. When you file your petition, your creditors will be put on notice and will be prohibited from calling, writing or taking legal action outside of the bankruptcy court to collect the debt.
If you file under Chapter 7, you can permanently discharge most debts. Most people who file a Chapter 7 bankruptcy keep everything they own and are not required to repay their creditors from their future wages. If you file for Chapter 13 you will typically only need to repay a small portion of the debt that you owe. The remaining balances are discharged at the end of your Chapter 13 case.
A bankruptcy filing can also immediately suspend a foreclosure or repossession proceeding, allowing a homeowner who was unemployed but is now working again the opportunity to catch up on past due mortgage payments.
The Disadvantages of a Personal Bankruptcy Filing
When you file for bankruptcy protection, it goes on your credit record and stays there for 10 years. It may hamper efforts to obtain credit, but the reality is that creditors are usually more interested in what you have done with credit since the bankruptcy filing. The mere fact that you filed will not necessarily exclude you from consideration.
You are only eligible to get your debts discharged in bankruptcy every so often. The law requires people wait 8 years after receiving a Chapter 7 discharge to receive a Chapter 7 discharge. The law requires people wait 6 years after receiving a Chapter 7 discharge to receive a Chapter 13 discharge and 4 years from Chapter 13 discharge to Chapter 13 discharge.
Contact John Hargrave and Associates
We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.