It is important that readers of this blog understand that their financial situations are unique. Individuals are advised that this and other articles on this blog are informational only and case-specific help should be sought from a bankruptcy attorney.
However, there are some general points that readers may find valuable about the effects of Chapter 7 bankruptcy on filers’ personal finances that are relatable across cases. For example, a person who has their debts discharged through Chapter 7 bankruptcy may see the process on their credit report for up to a decade. As a person’s credit report and score are used by lenders for the purpose of securing loans, mortgages, and credit cards, the presence of a bankruptcy can have a wide impact on a person’s capacity to receive credit.
Additionally, filing for Chapter 7 bankruptcy will force a person to take stock in their actions regarding how they got to the point of needing the protections of bankruptcy to get back on financial footing. A filer will generally have to explain themselves to their bankruptcy court to move through the process toward discharge.
Finally, a Chapter 7 bankruptcy filing may force a person to change their lifestyle and standard of living as Chapter 7 requires filers to liquidate many of their assets to pay back their creditors. Filing for Chapter 7 bankruptcy is not an insignificant undertaking and can have far-reaching consequences for a person’s finances. Speaking with a bankruptcy attorney is a good way to have a person’s questions answered about the process.