Is Chapter 7 Bankruptcy the Right Move for You?

Chapter 7 Bankruptcy Attorney discusses pros and cons - pictured is young couple consulting with professional

As a Chapter 7 bankruptcy attorney in Philadelphia, an important piece of our job is counseling people in bad financial situations. When someone has a large amount of unsecured debt that he/she is unable to pay, and the individual is being harassed by creditors, getting out from under the weight of unmanageable debt through Chapter 7 bankruptcy can sound like a great idea.

A Chapter 7 Bankruptcy Attorney in Philadelphia Explains the Pros and Cons

When you are considering bankruptcy, you need to consult with a qualified Chapter 7 bankruptcy attorney who can help you weigh your options. Below are some of the pros and cons of Chapter 7.

Pros of Chapter 7 Bankruptcy

Your debt is erased quickly and creditors have to stop

Chapter 7 bankruptcy has the advantage of being a relatively fast process – usually only 3-6 months. Plus, once you file for bankruptcy, a hold is placed on all collection efforts, so you immediately get some breathing room.

Chapter 7 is good for removing unsecured debts

Unsecured debt means debt that is not backed by any collateral that can be repossessed if there’s a default. Two examples are medical bills or credit card bills. When you have a lot of those debts, Chapter 7 is potentially a good option.

Chapter 7 is more effective for those with moderate incomes

One requirement of Chapter 7 bankruptcy is that your income must be lower than the state median income. In the event this describes you, Chapter 7 could be a good choice.


In a small number of cases, the client may lose some of their assets
Chapter 7 is called a “liquidation” bankruptcy because it may involve seizing and selling some of the debtor’s possessions to pay off as much of their debt as possible. But this is not typical. In most cases, the debtor uses their exemptions to protect most of their valuable property, such as your primary car, primary residence, IRA or 401K, and other necessities.

Loan co-signers can be hurt

Do you have co-signers on loans that would be part of your bankruptcy filing? In such a case, the loans will become the responsibility of the co-signer.

Chapter 7 may cause temporary harm to your credit

Chapter 7 bankruptcy will affect your credit rating for years to come. However, long-term delinquency is also very damaging to your credit, so bankruptcy might not have that much of an effect. Furthermore, bankruptcy could still be the best option for you, because after it’s over you can rebuild your credit rating.

Seek the Advice of a Qualified Chapter 7 Bankruptcy Attorney in Philadelphia

You need experienced assistance to decide whether Chapter 7 bankruptcy, or another bankruptcy chapter, is the right call for your situation. Contact Alfred Abel Law Offices directly to schedule a consultation.