As a Connecticut resident currently weighing your bankruptcy options, you may have been looking into Chapter 7, as it is one of the most popular choices. It offers many benefits, though there are some drawbacks as well. Today, we will look at both.
According to FindLaw, Chapter 7 bankruptcy is also called liquidation bankruptcy due to the fact that it allows you to liquidate assets in exchange for the erasure of unsecured debts. This can be a great option if you are unable to make a repayment plan, which is necessary for the popular alternative, Chapter 13. For example, if you are currently underpaid, recently got fired, or otherwise do not have enough income to pay off a debt, Chapter 7 may be right for you.
Not only can filing for Chapter 7 get creditors to stop harassing you, but it can also erase your debts in a quick and efficient manner. As Chapter 13 relies on a repayment plan, it can leave you dealing with debt repayment for years. Chapter 7 can be completed in months.
It can be a difficult option in other ways, however. For example, very few personal items are exempt from liquidation. If you are attached to your personal property, it can be difficult to let it go. Chapter 7 bankruptcy filings will also last longer on your credit report.
Are you considering filing for Chapter 7 bankruptcy? If so, you may want to contact a bankruptcy attorney first. They will be able to examine your situation and help you decide what the best option may be.