The Pros and Cons of Choosing Chapter 7 for Your Wilmington Bankruptcy

The Pros and Cons of Choosing Chapter 7 for Your Wilmington Bankruptcy

Submitted by Rachel R on Fri, 05/19/2017 - 10:03am

The Pros and Cons of Choosing Chapter 7 for Your Wilmington Bankruptcy

Thinking about Wilmington bankruptcy? Pros and cons to help you decide

Image Source: Flickr User saturnism

For those Wilmington consumers deep in debt, bankruptcy is one option to consider if you’ve exhausted other routes and can’t find a way out of your financial mess. Most serious financial problems come from a life event such as divorce, illness or accident, unemployment or some other unforeseeable circumstance that increases expenses, decreases income, or both. If you can’t afford your debt, Chapter 7 might be the best option for your Wilmington bankruptcy. Here’s a look at the pros and cons.

Con: Filing Bankruptcy Will Lower Your Credit Score

It is true that bankruptcy will temporarily drop your credit score when you file. However, if you’re already deep in debt, your credit cards are maxed out, you’re missing payments or making them late, your credit score is already dropping every month. In truth, filing bankruptcy can stop a credit score free fall and give you the chance to start re-establishing credit.

Pro: You Can be Debt-Free in Just a Few Months

From start to finish, Wilmington bankruptcy can take just three or four months, on average. By contrast, Chapter 13 bankruptcy takes three to five years. Without bankruptcy, if you’re in over your head with debt, you might struggle under the load for years to come, with little to show for your effort. The faster you choose to file bankruptcy, the sooner you can be rid of most of your unsecured debt.

Con: Your Credit Card Accounts Will Be Closed

Once you file bankruptcy, your creditors are notified, and it will reflect on your credit report. Even if you have a credit card that isn’t maxed out, it will close after you file Chapter 7 Wilmington bankruptcy. You can’t hold back any cards by leaving them off your bankruptcy petition. However, within six months (on average) after your discharge, you can begin applying for new credit.

Pro: Bankruptcy Exemptions Help Protect Your Assets

In North Carolina, bankruptcy exemptions can help you protect most of your assets. Your car can generally be shielded unless it’s a luxury vehicle with lots of equity. Up to $35k of equity in your home can be protected in an individual bankruptcy and $70k if you file Wilmington bankruptcy as a couple. Some cash in the bank can be shielded, and there’s a $5k “wildcard” exemption that can shield any asset.

Con: Not All Debt Can Be Extinguished in Chapter 7 Bankruptcy

There are some types of debt that can’t be wiped out with Chapter 7. Only in rare cases can student loans be wiped out in bankruptcy. Secured debt like a mortgage or auto loan can’t be discharged unless you give back the asset through repossession or foreclosure, thus converting it to unsecured debt. But most unsecured debt, including credit card, medical bills, and some income taxes, can be wiped out.

Pro: Chapter 7 Bankruptcy Stops Debt Collectors for Good

Debt collection must stop, by law, as soon as your Wilmington bankruptcy attorney files your Chapter 7 case petition. That means the stress of dealing with debt collectors hounding you at work and home. Debt stress can wreck your quality of life, ruin relationships, and cause you problems at work. After you file bankruptcy, you can move on with your life without the debt and look forward to a brighter future.

There are pros and cons to each bankruptcy that are unique to every individual circumstance. The best way to find out if Chapter 7 is a fit for you is to contact a reputable Wilmington bankruptcy attorney to discuss your financial situation. The initial consultation should be free, and you can bring in your financial documents and discuss your options and get advice on your best path forward.

To find out more about the benefits of bankruptcy, contact the Law Offices of John T. Orcutt. Call +1-833-627-0115 now for a free Wilmington bankruptcy consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro or Wilmington.

 

 

Debts Hurt! Got debt? Need help? Get started below!

Serving All of North Carolina

  • Bankruptcy Attorney Fayetteville NC
  • Bankruptcy Attorney Durham NC
  • Bankruptcy Attorneys Wilson NC
  • Bankruptcy Attorneys Greensboro NC
  • Bankruptcy Attorneys Southport NC
  • Bankruptcy Attorneys Wilmington NC

Bankruptcy Attorneys Raleigh NC (North)

6616 Six Forks Rd #203 Raleigh, NC 27615 North Carolina

Tel: (919) 847-9750

Bankruptcy Attorneys Raleigh NC (North)

Bankruptcy Attorney Fayetteville NC

2711 Breezewood Ave Fayetteville, NC 28303 North Carolina

Tel: (910) 323-2972

Bankruptcy Attorney Fayetteville NC

Bankruptcy Attorney Durham NC

1738 Hillandale Rd Suite D Durham, NC 27705 North Carolina

Tel: (919) 286-1695

Bankruptcy Attorney Durham NC

Bankruptcy Attorneys Wilson NC

2215 Nash St N Wilson, NC 27896 North Carolina

Tel: (252) 234-9194

Bankruptcy Attorneys Wilson NC

Bankruptcy Attorneys Greensboro NC

2100 W Cornwallis Dr. STE O Greensboro, NC 27408 North Carolina

Tel: (336) 542-5993

Bankruptcy Attorneys Greensboro NC

Bankruptcy Attorneys Southport NC

116 N Howe St. Suite A Southport, NC 28461 North Carolina

Tel: (910) 218-8682

Bankruptcy Attorneys Southport NC

Bankruptcy Attorneys Wilmington NC

116 N. Howe Street, Suite A Southport, NC 28461 North Carolina

Tel: (910) 447-2987

Bankruptcy Attorneys Wilmington NC