Michigan residents who are struggling to make it financially probably spend some time looking at debt relief options. There are several out there, some of which are better than others. The type one uses really is a personal decision, but one should know how one's choice will affect the individual in the long run. This week, this column will address the good and the bad of Chapter 7 bankruptcy law.
There is a lot of good that can come out of filing for Chapter 7 bankruptcy. First off, it can offer quick debt relief. From filing to claim and approval and debt discharge, it takes three to six months. All qualifying debts will be cleared if one's case is approved; there are no repayment plans offered like with a Chapter 13 filing. Other benefits include:
- The ability to quickly rebuild credit after a few years
- Stop creditor harassment
- The ability to keep some property
Of course, there are negatives to filing Chapter 7. For one, it will be reported to credit agencies and will remain on one's credit report for roughly a decade. Some property will need to be returned to creditors or sold to pay off creditors. One may struggle to access credit for a little while. Finally, not all debts qualify for discharge, meaning one may still have some debts for which he or she is responsible even after bankruptcy approval.
At the end of the day, the choice to file or not to file Chapter 7 bankruptcy all comes down to personal choice. Do the benefits outweigh the disadvantages? Michigan residents who would like more information about this topic before making such a significant decision can turn to a bankruptcy law attorney for guidance on the matter.