Filing for Chapter 7 bankruptcy can be a good option when a person feels overwhelmed with debts and cannot pay them all. Although it is a difficult decision to make and the whole process takes a lot of time, it seems like the only right option in that bad financial phase.

Filing for Chapter 7 will help get some relief:

If you are thinking the same way, then you are not completely wrong. When your debts start to affect your personal life, such as your relationships, your ability to sleep, then you feel that filing for bankruptcy is the only option left for you. You will be able to get rid of most of your debts and start over.

This thing also has a different side:-

Now is the time to flip the coin and see the dark side of bankruptcy. If you file for bankruptcy, you completely destroy our credit score. You will have to start over to build a new credit score. And you won’t be eligible for new credit for a specified period of time.

Things to keep in mind before filing for Chapter 7 bankruptcy:-

• You will need to check the Chapter 7 eligibility criteria in your state and make sure you are eligible to file for one. It depends on many factors, such as the median income in the state and the selection of the appropriate bankruptcy court.

• Once you file the official petition, your financial matters are no longer personal. The bankruptcy court has great power to interfere in your financial affairs.

• You agree to the condition that the Chapter 7 bankruptcy trustee may sell all of your non-exempt assets.

• Some states give you the option to choose between state exemption laws and federal exemption law. It is better to check if your state gives you that option or not. And if yes, then you should compare both sets of exemption laws and choose the most suitable one for you.

• It’s not an instant process, and more importantly, you can’t get rid of all your debt. Some debts are not dischargeable.

• A bankruptcy attorney plays an important role in the entire process. Choosing a suitable lawyer is the most important thing. You should not hide any details related to your finances from your bankruptcy attorney.

• You can’t treat your friends or family any differently when it comes to paying off debt.

• Even after you obtain a discharge of your debts, the bankruptcy trustee and creditors have a 2-month period to contest your right of discharge.

• It takes almost 4 to 6 months after filing for your debts to be eliminated.