Filing Chapter 7 bankruptcy gives you a fresh start. To be honest, it comes as a sigh of relief. Once you file for chapter 7 bankruptcy, the court temporarily stops creditors from repossessing property, turning off your utilities, trimming your wages, or collecting payments from you.
In his connection, you can have time to think about how best to reset your finances. You can put in place measures on how you can get back to your feet financially. You will not have the pressure from creditors who want you to pay your debts. Only unsecured debts are cleared away. So, there are some that you will have to ensure you pay as expected. This includes child support, alimony, a lot of government student loans, non-dischargeable debt from previous bankruptcy, debts emanating from divorce, and income taxes less than three years since they were filed. Therefore, you will have to be aware of these conditions when filing for chapter 7 bankruptcy.
However, when you file for chapter 7 bankruptcy, it will have a lasting negative impact on your credit score. Accessing loans in the future will be a bit hard. For that reason, it is an approach that should be undertaken as a last resort when you have not come up with a better strategy to pay off your debts. But you can use it to get sometime.
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