Pros and Cons of Filing Chapter 7 Bankruptcy

When you have reached the point where you are already struggling to make ends meet, creditors seem to be harassing you left and right, and you find it hard to follow your daily routine, it’s probably time to file for bankruptcy. Chapter 7 Bankruptcy is a way for you to get a fresh start as it is a petition for the court to erase your debts. It’s pretty much a straightforward process that gives you a clean slate. However, it is not as easy as it sounds as there are things to consider when taking this step. Ask any Baltimore bankruptcy lawyer and they will tell you that there are both pros and cons to the process.

But before we get to that, let’s talk about Chapter 7 bankruptcy for a bit. This type of bankruptcy is for people who really have no means of paying their debts. As a ticket out of poverty, this type of bankruptcy can’t be filed by just anyone. You need to pass a “means test” to qualify for filing this. Your entire financial records will be examined to determine whether your disposable income is below the median income and you really are incapable of paying your debts. And although failing the “means test” doesn’t happen often, it does from time to time so you should seek the help of a talented bankruptcy lawyer to help you with your case. 

Now, let’s take a look at the pros and cons of filing for Chapter 7 bankruptcy. Here are some of them:


  • Filing for this type of bankruptcy only takes a short time. From filing to relief from debt, the whole process only takes 3-6 months. To do this right, make sure to hire a Baltimore bankruptcy attorney to help you out.
  • If filing for Chapter 7 bankruptcy is a success, all of your debts will be wiped except for non-dischargeable debts. These are student loans, bills created within 90 days before filing, taxes, and past-due child support.
  • As soon as you have filed your case with the bankruptcy court, you are now protected from creditors. That’s because the filing triggers an automatic stay which will stop all collection actions. It may also stop evictions, repossessions, and foreclosures temporarily.
  • After filing for bankruptcy, you will get more credit card offers and this will help you rebuild and increase your credit score.
  • For most states, their exemptions will allow you to keep most of your property. Also, you will get to keep the salary you earn and the properties you buy after filing for Chapter 7 bankruptcy.
  • If you have already filed for Chapter 7 and you somehow fall under another financial disaster within six years of filing, you can always opt for Chapter 13 as a last resort.
  • You still get to keep your car after filing for Chapter 7 provided that you keep paying for it. If not, this type of bankruptcy also allows you to surrender your car and stop paying for your car loan.


  • Filing Chapter 7 bankruptcy can only be done once every 6 years so you need to be careful with incurring any additional financial problems even if you have the option of filing for other types of bankruptcy.
  • Bankruptcy records stay on your credit report for up to 10 years. However, that does not mean that you can’t begin rebuilding your credit immediately.
  • If you have properties that are not exempt from sale by the bankruptcy trustee, you will lose them. These will be sold to help pay off your creditors. You may also end up losing some of your luxury possessions. So if you have expensive properties that you don’t want to lose, make sure to ask your bankruptcy lawyer whether there’s a possibility that you will lose them.
  • If you don’t already have one, getting a mortgage will be nearly impossible once you file for bankruptcy.
  • If you have too much disposable income, you can’t file for this type of bankruptcy since it means you are capable of paying off your debt. In this case, it may be better for you to file for Chapter 13 bankruptcy instead.
  • Although you can file for Chapter 13 after filing Chapter 7, you can’t file for Chapter 7 if you have previously undergone bankruptcy proceedings under Chapter 13 or 7 within the last six years.
  • You also can’t file for Chapter 7 bankruptcy if your previous case for Chapter 7 or 13 was dismissed within the last 180 days due to violating a court order or requesting the dismissal after your creditor requested relief from the automatic stay.

If filing for bankruptcy is your last resort to discharge your debts, consider everything before proceeding with it. To help you prepare and choose the right type of bankruptcy, hire Richard Hackerman, a Baltimore bankruptcy lawyer so that you know the benefits and repercussions of the choice you are about to make. Hire Richard Hackerman today and he will make sure to help you every step of the way.

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