There are many pros and cons to bankruptcy.

What are the Advantages of Chapter 7 Bankruptcy?


Chapter 7 bankruptcy is usually the most affordable bankruptcy!


A typical Chapter 7 bankruptcy lasts about 90-120 days.

Complete forgiveness of unsecured debt

An excellent tool where credit cards, medical bills, and personal loans are too big to pay.


Can get rid of secured payments where the payment is too large, like an unaffordable car or house payment if you give up or surrender the collateral.

What Are the Disadvantages of Chapter 7 Bankruptcy

No catch up of secured debt

Chapter 7 bankruptcy cannot help catch up on a delinquent mortgage, car, or other secured items that a person intends to keep. Generally, the debtor needs to be current on secured debt if he wants to keep the collateral. Chapter 13 bankruptcy may be used for catching up on secured items.

No reduction in monthly payments

Chapter 7 bankruptcy cannot change the terms of a mortgage or car loan. Changing mortgage terms may be done through a loan modification, and sometimes, with the right facts, in a Chapter 13 bankruptcy.

Must qualify

Even if Chapter 7 has more pros than cons for you, you must “qualify” for a Chapter 7 bankruptcy. Earning very high wages may disqualify you from a Chapter 7 bankruptcy depending on your expenses and the type of debt you have. Generally, qualification is based on a means test using your gross income and household size.

Longer credit reporting

Stays on a credit report for up to ten years, but there is life after bankruptcy and action you can take to improve your credit score after bankruptcy.

Want to learn more about bankruptcy and strategies to overcome debt?

Chapter 7 Bankruptcy – Best if wiping out credit card or signature loans will help. Cheapest, fastest bankruptcy, but can’t help you catch up on past due mortgage or vehicle loans.

Chapter 13 Debt Reorganization – Best if need to catch up on long term debt, such as mortgage or vehicle.

Wiki – In-depth articles on some of the more detailed areas of bankruptcy and debt relief.

Ready to find out whether bankruptcy can help you?

Complete our free, online debt evaluation form or call our office at (903) 759-5922. You can also email Find out if bankruptcy is your best option and whether it will help you.