There’s no question that deciding whether to declare bankruptcy is very difficult. It affects your future credit, current assets and ability to file bankruptcy again for several years. However, bankruptcy can also improve your financial health and enhance your peace-of-mind after creditors stop calling. Here is a list of some pro’s and con’s to consider before deciding whether to file bankruptcy, but to fully evaluate the pro’s and con’s you need to call a bankruptcy lawyer for a free consultation.
- Although a bankruptcy stays on your credit report for up to 10 years, the time to complete the bankruptcy process under Chapter 7, from filing to eliminating debt, takes only about 4-6 months.
- California bankruptcy exemptions usually protect all property in chapter 7 bankruptcy. There are 2 sets of California bankruptcy exemptions schemes to choose from, and not everyone qualifies for California bankruptcy exemptions. To find out if your property can be protected in chapter 7 bankruptcy you need to call a bankruptcy lawyer.
- Declaring bankruptcy now can start rebuilding your credit. Although, you can only file under Chapter 7 once every eight years, you can always get a Chapter 13 plan if there is another disaster before you are entitled to file for Chapter 7 again.
- Bankruptcy can damage your credit for some time to come. A Chapter 7 bankruptcy can remain on your credit report for up to 10 years. However, people with low credit scores often see a jump in their credit score a year after bankruptcy.
- You will lose property that you own that is not exempt from sale by the bankruptcy trustee. Again, to find out if you can protect your property in bankruptcy you need to speak with a bankruptcy lawyer.
- Bankruptcy will make it nearly impossible to get a mortgage for a few years if you don’t already have one. If you are able to get a mortgage, most likely you will pay a higher interest rate. Likewise, obtaining a car loan at a low interest rate may be difficult for a few months or years following bankruptcy.
Should You File Bankruptcy?
The answer to whether you should file bankruptcy depends on your individual circumstances. Bankruptcy attorneys are more likely to recommend chapter 7 bankruptcy if (1) all assets can be protected, (2) you qualify for chapter 7 bankruptcy, and (3) you have an overwhelming amount of debt or immediate collection action that cannot be handled outside of bankruptcy.
To learn more about your bankruptcy options call our attorney at (916) 596-1018 for a free consultation.