Residents of Long Island, New York, who are facing considerable debt, regardless of the source, may need to begin reviewing debt relief options. Although there are many options available, one of the most common options is bankruptcy. The decision to file for bankruptcy, however, should not be taken lightly. There are advantages and disadvantages involved, and there are multiple forms of bankruptcy to consider.
For individuals, Chapter 7 bankruptcy can offer numerous benefits. The process from filing to relief typically lasts between three to six months, so this is a relatively quick debt relief method. Additionally, filers are allowed to keep their earnings free from garnishment, as well as keep most of their property that is considered a necessity. Aggressive collection activities from creditors will immediately cease and a filer can move toward rebuilding their credit. Additionally, certain lenders may look favorably upon individuals who take steps to improve their financial situation, regardless of the method.
There are obvious drawbacks to such a decision as well. Filing for Chapter 7 bankruptcy may be listed on a credit report for a period of up to 10 years. Credit cards and non-exempt property will have to be forfeited by a filer. There are certain debts, such as child support and student loans, that cannot be discharged through bankruptcy. Borrowing significant amounts of money in the future, such as for a mortgage, will be difficult after a bankruptcy. Finally, if a filer encounters an even worse financial situation in the future, bankruptcy may no longer be an option to relieve the new debt.
Many people encounter financial hardships at some point in their life. If the situation becomes severe enough, drastic action may need to be taken.
Source: Findlaw, “Pros and Cons of Declaring Bankruptcy under Chapter 7,” accessed on Aug. 2, 2015