Finances are complicated and once you fall behind, it can seem like an uphill battle. While it may be a disheartening decision, filing for Chapter 7 bankruptcy may be in your best interest. Doing so may make it easier for you to start over with a clean slate.
This video will discuss both the pros and cons of filing for Chapter 7 bankruptcy.
A pro of filing for Chapter 7 bankruptcy is that it will eliminate almost all of your unsecured debt. Unsecured debt is where there is no collateral at risk. Credit cards, medical bills, and personal loans all would fall into that category. Taxes do not go away, however.
The biggest con of filing is that your credit will take a significant hit. That is unavoidable, unfortunately. It is common for your credit score to drop around 100-150 points and that will stay on your credit history for 10 years.
If you are considering filing for Chapter 7 bankruptcy, carefully weigh your options. It may provide you a clean slate, but there are drawbacks as well.