Deciding to file for Chapter 7 bankruptcy in Connecticut is a big decision that shouldn't be taken lightly. There are pros and cons, which must be weighed carefully while studying your situation.
Pros
- It will prevent your lenders from aggressive collection action.
- Chapter 7 is easily understood and explained to curiosity-seekers and future lenders. Sure, there might have questions about bankruptcy and it will hurt your credit. But if you talk yourself out of Chapter 7 when it could be the right decision, consider a future of trying to explain your missed debt payments, defaults, repossessions and lawsuits. And yes, all of those will hurt your credit, too.
- You will be forced to be more disciplined financially. If you ever intend to borrow money again, you will need to be frugal and responsible about debt. Even though you might be able to open new lines of credit anywhere from one to three years after filing for bankruptcy, the interest rates will be much higher. Demonstrating ability to pay those debts on time is the only way to get the interest rates down.
- In a Connecticut Chapter 7 bankruptcy, we have the option of selecting either the Federal Bankruptcy exemptions, or the Connecticut property exemptions which will allow us to help you many of the things you own, including more property than you probably need. After you file, you will be able to keep any salary you earn and any property you purchase.
Cons
- Your credit will take a severe beating. Chapter 7 bankruptcy can remain on your credit report for up to 10 years.
- You will lose all of your credit cards.
- You will lose property that you own if it's not exempt from sale by the bankruptcy trustee.
- You likely will lose luxury possessions, like a boat or second home.
- It will be difficult to refinance a home or to get a mortgage if you don't already have one.
- It won't relieve you of student loan debt or obligations to pay alimony and/or child support.
- You can only file under Chapter 7 once every eight year.
If you are a Hartford, CT area resident considering filing for Chapter 7 Bankruptcy protection, please contact us today for a free, no obligation consultation.
