Pros and Cons of Bankruptcy Option Chapter 7

When you’re in a financial bind with no way out, it’s time to start considering your options. This can also mean that you may need to thinking about the pros and cons of bankruptcy. Although the word strikes fear into the hearts of many people, there are both good and bad aspects of going through with the process. One of the most common types of bankruptcy is Chapter 7, which is mainly geared toward unsecured consumer debt, such as credit card debt. As you move forward, here are some of the pros and cons to consider of filing for Chapter 7 bankruptcy.

Pro: Quick Turnaround

If you’re looking for a quick turnaround, Chapter 7 is the way to go. Cases are usually completed within three to six months, after which time eligible debts are discharged, according to Nolo. There are certain types of debt, however, that cannot be discharged, such as student loans and unpaid child support. If you’re ready to take action now and you have a good deal of dischargeable debt, then Chapter 7 is one of the fastest and most efficient ways to do so.

Con: You Get One Chance

If you file for Chapter 7 bankruptcy now, Oswalt Law Group cautions that you’ll lose the opportunity to do so again in the near future. In other words, don’t be the boy who cried wolf too many times. Make sure that you’ve truly exhausted all your options, and that Chapter 7 is the right choice for you. If you’re going to file, do it at the right time and plan ahead.

Pro: Getting Your Credit Back on Track

A big perk of Chapter 7 is that it happens fast, and as your debt is discharged, you’ll be able to get your credit back on track more quickly as time passes. Although this type of bankruptcy stays on your credit report for ten years, in the meantime you can work toward using credit responsibly. If you’ve had a consistent reliance on credit cards, it also gives you the opportunity to learn how to change your lifestyle to accommodate a cash-only existence. You can also say goodbye from dealing with debt collectors calling every day and receiving past due notices in the mail. Chapter 7 may have a negative impact on your credit score for a certain period of time, but it also means a fresh start.

Con: Loss of Property

Under Chapter 7, eligible debt is quickly discharged, but as noted by Nolo, you also don’t get to retain nonexempt property. Your property will be seized, sold, and the proceeds divvied up amongst your creditors. If you don’t have any property you need to protect, then Chapter 7 can be a boon to your financial situation. Be careful about what’s considered exempt and nonexempt, though. There are many ins and outs of filing for Chapter 7, including what you’re allowed to keep.


The best way to approach whether Chapter 7 is right for you is to assess your own personal needs. Every situation is unique, and there’s no “one size fits all” when it comes to bankruptcy. Consult with an attorney at Van Horn Law Group to find out what route will put you on the road to financial stability.

About Chad Van Horn

Chad T. Van Horn, Esq. is a South Florida business leader and founding partner attorney of Van Horn Law Group, P.A. Through a combination of dedicated philanthropy, spirited entrepreneurship and legal expertise, he applies his resources and network to helping people. Learn more about Chad Van Horn

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