The Pros & Cons of Chapter 7 Bankruptcy

Posted by Wesley Scott on June 20, 2019 at 11:19 PM
Wesley Scott

When weight your debt relief options listing out the pros and cons is a visually helpful way to make a decision as you are doing your research. Chapter 7 bankruptcy and Chapter 13 bankruptcy each have their own sets of benefits and challenges.

Chapter 7’s are most common and what most people think of when they think “bankruptcy” –debt quickly & efficiently wiped away. That is certainly true and certainly goes in the ‘pro’ column. Typically a Chapter 7 discharge takes between 3-6 months. Short and sweet. The only debt that is continually paid is for assets that you want to retain such as a house or a vehicle and debts that can’t be discharged under the bankruptcy code. This subsequently improves your credit being that you have significantly less debt than before.

Continuing with the ‘pro’ list, there is no minimum debt one must have to file a Chapter 7. Many filers also lose no assets while going through a Chapter 7. Finally, one of the biggest benefits for many of our clients: filing a Chapter 7 stops creditor harassment and collection activity. This means no more wage garnishments, levies, foreclosures, or repos!

There are, naturally, things that a potential filer needs to be aware of before making the final leap towards a Chapter 7. First, there are cases in which debtors can lose non-exempt assets to a Chapter 7 trustee. Though this is uncommon, it is still a possibility.

Another thing to take into consideration in a Chapter 7 is how the bankruptcy affects any co-signers you may have. While the filer is no longer liable for the co-signed debt, the co-signer is. Finally, a Chapter 7 can only be filed once every eight years. If you have filed a Chapter 7 bankruptcy previously, you may only be eligible for a Chapter 13 or you may not be eligible to file at all at that point in time.


Request a free bankruptcy consultation at to get the best advice on how, what, and when to file bankruptcy!