Although it’ll cost you, it’s only fair that you should. Chapter 7 bankruptcy, on the other hand, allows you to get rid of your car and your car loan! Here’s everything you need to know about retaining your car after bankruptcy filing.
Late payments and other blemishes on your credit report are no longer a factor in determining your credit score following bankruptcy.
Having a fresh start after bankruptcy gives you the opportunity to repair your credit and raise your score. One year after filing Chapter 7 bankruptcy, most people’s credit scores are better than they were on the day they began the bankruptcy process.
Credit and banking will be easier to come by for you.
After you file for bankruptcy, you’ll be inundated with credit card offers. In addition to helping you rebuild your credit and raise your credit score, this will give you access to the financial security that comes with owning a credit card in case of an emergency.
Are There Any Disadvantages to Chapter 7 Bankruptcy Filing?
Not everyone should file for Chapter 7 bankruptcy. And even if it seems like the best way to get out of debt, bankruptcy may not be the best option for you after all.
If you earn too much money, you can’t file for Chapter 7 bankruptcy.
If you’re making less than the national average, you’re probably wondering how it’s even possible for you to do that. There is nothing to worry about. This is for people who, after covering their essential daily expenses, still have money left over to put away in a savings account.
The means test is used to determine how much disposable income a person has. You can’t simply walk away from your debt if you have too much money in the bank. A bankruptcy discharge can still be obtained after completing a repayment plan under Chapter 13 of the Bankruptcy Code.
A short-term ding to your score is almost certain if you have good credit.
Prior to filing for bankruptcy, those with high credit scores who have made on-time monthly payments will see their score drop initially. However, a bankruptcy filing can actually improve a person’s credit rating. In addition, once their bankruptcy is discharged, they can start working on improving their credit score right away.
Not all unsecured debts are eliminated.
There are some unsecured debts that cannot be discharged in bankruptcy, such as alimony or child support. Other debts, such as student loans and tax debts, can be difficult to get rid of through bankruptcy.
Certain kinds of property can be taken away from you.
In order to get a bankruptcy discharge in just a few months, you have to give up some of your most valuable possessions. Chapter 7 bankruptcy trustees rarely come across non-exempt property, which is property that can be sold to satisfy debts owed to creditors.
If you have valuable assets that you don’t want to lose, you should consult with a bankruptcy attorney. This will help to determine whether or not filing for Chapter 13 bankruptcy is a better option for you in terms of debt relief.
Others are not shielded by your Chapter 7 bankruptcy filing.
Only your obligation to pay the debt is eliminated by a Chapter 7 bankruptcy filing. Everyone’s debt is not eliminated by this. In order to protect a co-signer in Chapter 13 bankruptcy, you must pay the debt back through your repayment plan.