Bankruptcy can happen to anyone. Unforeseen medical bills, an economic crisis, and other financial woes can overcome a person or family quickly. In the United States, filing Chapter 7 bankruptcy is the most popular option for Americans struggling with debt. With over half of yearly bankruptcies filed under Chapter 7, it is a viable option for many people whose debts exceed half of their yearly income. Here are the benefits and the setbacks of declaring this type of bankruptcy:
Con: Filing Any Kind of Bankruptcy Ruins Your Credit Score
No matter how you approach filing bankruptcy, the reality is that your credit score won’t be very pretty for a long time (approximately 10 years). However, waiting too long to file bankruptcy when needed can further hurt your credit scores and complicate an already difficult situation.
Pro: You Get a Blank Slate
Making a mistake can have a heavy burden on anyone. When it comes to bankruptcy, it is both a financial burden and a mental one. On the bright side, filing Chapter 7 bankruptcy is a chance to start fresh and rebuild. Sure, it’s going to be tough for a while to get approved for new credit cards or loans, but it is possible to get it back.