Pros and Cons of Chapter 7 Bankruptcy

Financial problems are extremely stressful and can often get worse over time. Bankruptcy is a way to get your problems under control. It can be complicated and comes with repercussions, but it can help in many cases. With the help of an attorney, you can file for Chapter 7 bankruptcy and get your life back on track. So, if you’re looking for a bankruptcy attorney in Richmond VA or bankruptcy attorney Hopewell VA, Canfield Wells LLP is here to help. Consider the advantages and disadvantages of Chapter 7 bankruptcy.

Advantages of Chapter 7 Bankruptcy

Relief from Debt Payments in Three to Six Months

If you work with a Richmond VA bankruptcy attorney, you can get relief within a few months. This will help you get your feet back under you and start fixing your financial life.

Certain Property is Exempt from Liquidation

Chapter 7 bankruptcy requires you to liquidate many of your possessions in order to pay your debts. But most states include exemptions. For example, if you’re working with bankruptcy attorneys in Hopewell, VA, Virginia law allows you to keep your home, car, and personal property up to a certain value. 

Relief from Aggressive Collections 

Collection’s agencies will go to many lengths to reach you and their approaches can be aggressive and unsettling. Chapter 7 bankruptcy will protect you from collections calls, giving you peace of mind as you rebuild.

No Minimum Level of Debt Required

For some bankruptcies, you need to have certain levels of debt. But most people are eligible to apply for relief through Chapter 7 bankruptcy.

While these advantages are good, there are disadvantages to Chapter 7 bankruptcy that you need to be aware of. Our team of bankruptcy attorneys in Hopewell VA can help you work through these.

Disadvantages of Chapter 7 Bankruptcy

It Stays on Your Credit Report for Ten Years

If you file for bankruptcy, there are long-term consequences. A Chapter 7 bankruptcy will stay on your credit score for a decade, impacting your ability to get loans, purchase a home, or potentially even rent as a tenant. 

You Lose Property

While some things are protected, you will lose any luxury property you own when filing for Chapter 7 bankruptcy. A Richmond VA bankruptcy lawyer will be able to help you determine what qualifies for exemption and what you’ll be expected to surrender.

You Lose Your Credit Cards

If you rely on credit cards, you won’t have that option anymore. While the relief from credit card debt is good, you’ll lose the security of having open lines of credit in an emergency. Eventually, you’ll be able to open new credit cards, but your credit score will take a big hit and it will take you a long time to recover.

You Can Only Apply for Chapter 7 Every Six Years

While you hopefully won’t need to apply again, disasters happen. If you apply for Chapter 7 now, you can’t apply again for another six years. So, if something goes terribly wrong in your life and your financial situation gets even worse, this won’t be an option to help you fix it. You’ll have to find another solution. While your bankruptcy lawyers in Hopewell VA will be able to help you find other options, they might not be a good fit.

If you’re considering applying for bankruptcy, Canfield Wells LLC in Richmond and Hopewell can help you determine if Chapter 7 is a good fit for your situation. Make an appointment to talk to our attorneys today and we’ll help you get back on your financial feet!