Filing Bankruptcy under Chapter 7


Declaring bankruptcy can be a difficult process for anyone. You may feel pretty discouraged as it can affect your credit scores, reputation and self image as well.

When you are filing for bankruptcy under Chapter 7, there are some factors you need to keep in mind. Of course you need to know what are the advantages and disadvantages of filing for Chapter 7. Here are some of them listed out for you:declaring-bankruptcy-can-be-a-difficult-process


  • Debts cleared: Filing for Chapter 7 helps in clearing all your debts which if not cleared, can have complication on your credit scores in future. This could be worse than bankruptcy. The filing of Chapter 7 takes anywhere between 3-6 months. After that you will be free from all your debts, law suits, repossessions and defaults.
  • Your Possessions and Income: Most of the State exemptions allow you to keep your property and possessions more than what you might need. You can also keep the property you buy after filing of Chapter 7. You can also keep the salary you earn after filing for bankruptcy.
  • Loan Possibilities: You can still get loans after filing for Chapter 7. Although it is not fair to say this for someone who has just cleared all his financial issues but there are specialists who lend for “bad risks”.
  • Credit Cards: You can get new credits within 1-3 years of filing for bankruptcy. Of course the interest rates will be much higher as you have just filed for bankruptcy.
  • Filing Chapter 13: If you have filed for bankruptcy with Chapter 7, you have a time limit to file bankruptcy again under Chapter 7. You cannot file until 6 years from the first filing of bankruptcy.

However, if you have any similar situation in future, you can still file for Chapter 13. Of course you must know that it will show on your credits. If you have received a Chapter 13 discharge in good faith after paying 70% of your unsecured debts, the 6 year bar for Chapter 7 will not apply.declaring-bankruptcy-can-be-a-difficult-process2

  • Alimony and child support obligations: If your spouse has filed for bankruptcy, it cannot relieve him of your alimony and your child support obligations unless he has a court order from the family court.
  • Student Loan Debt: If you have taken a student loan and you have filed for Chapter 7, it can prevent the lenders from taking aggressive collection action against you. But the loan has to be cleared by you only.


  • Credit: Filing for bankruptcy can spoil your credit. Your credit report will carry this for at least 10 years.
  • Credit Cards: You will surely lose all your credit cards post filing for Chapter 7 bankruptcy.
  • Property & Possessions Lost: If you have any luxury possessions or a property which is not exempt from sale by bankruptcy trustee, you will surely lose it.
  • Mortgage: You cannot go for a mortgage after filing for bankruptcy filing under Chapter 7.
  • Cannot file Chapter 7: If you have just completed all your processes and filed for Chapter 7 bankruptcy, till another 6 years you cannot file again. So, even if something really bad happens again, you cannot file again.

If you have filed for a previous Chapter 7 or Chapter 13 case and it was dismissed within the past 180 days, you cannot file for Chapter 7 again. The reasons for dismissal could be that you might have violated a court order or requested for dismissal after a creditor asked for relief from the automatic stay.

  • Obligations & Loans: You cannot get rid of your obligations like alimony or child support as well as any student loans if you file for bankruptcy under Chapter 7.


Hopefully these will help you to understand the filing of Chapter 7 better. And you can now plan your bankruptcy filing in advance online at However, as professional bankruptcy attorneys in Milwaukee, WI, we feel obliged to share that a consultation with us before going ahead to file will probably yield better results in the long term than filing a Chapter 7 will.