Benefits

• With Chapter 7 bankruptcy, you will be free from being sued or having wages garnished for debts included in the case. While your case is awaiting a final discharge, no creditors can contact you. This is a huge pro for those who feel their quality of life is suffering due to repeated collection calls and letters. It enables people to focus on saving for their future, not paying for mistakes or misfortunes of the past.
  
  

Warning

• You may not be able to keep your car or house in some bankruptcy cases. If you want to keep your property, you must get approval to reaffirm the debt in a Chapter 7 case. You may wish to consider a restructuring of debt through Chapter 13 bankruptcy if you can reasonably keep your car and/or house once other debts are reorganized. Whenever property is involved, it is probably best to hire a qualified bankruptcy lawyer.
  
  

Considerations

• A con of bankruptcy is you may have to give up any luxury possessions, such as jewelry, or stocks and bonds. However, a pro is you cannot lose your retirement account in a bankruptcy case.
  
  

Undischargeable Debts

• If the bulk of your debt is due to expenses such as student loans, back taxes, fines and child support, then bankruptcy likely has more cons than pros in your case. Most back taxes and student loans cannot be discharged through bankruptcy. In a few rare cases, student loans can be liquidated but only if a serious disability is proven or the school has closed. Child support can never be removed as a legal obligation through a bankruptcy court and failure to pay this could be a criminal act in most states.
  
  

Future Employment

• In most cases, filing bankruptcy should not harm your chances of future employment unless you work in the finance industry. If you are a banker or loan officer, you will likely be unable to remain gainfully employed in your field after bankruptcy. This is an important con to consider.