Whats worse a chapter 7 bankruptcy or a foreclosure on your credit?
Question:
Answer:
That depends on what you are trying to do.
It's can sometimes be easier to buy a house after a bankruptcy than it is to a foreclosure.
A bankruptcy is technically worse but, since you can only file once every 10 years, many companies that turned you down before bankruptcy will extend you credit albiet at a higher rate.
bankruptcy
Both are not pleasant experiences, and should be avoided at all costs.
Only as a last resort should one go bankrupt, and if it's necessary, chapter 11 is least of all evils.
Remember, Donald Trump went bankrupt twice.
Worse in what way? In terms of future credit extensions, they are probably not significantly different. Its not easy to file chapter 7. Most personal bankruptcies require credit counselling (for personal filings) and start as a 13 before being converted to a 7. You will end up paying your lawyer a lot. If this is a business that you are liquidating, this business is done. The assets will get broken up and you would basically have to reincorporate if you wanted to go into business in the future. I would say that its better to have someone forclose on your car, for example, if it would keep you out of bankruptcy. You will have to assess what the value of your assets are and decide what you lose by way of your foreclosure, as opposed to liquidating other assets. Also depending on wheter other assets are secured, you may want to figure out what assets are not secured. The recent Bankruptcy Reform Act that went into effect in October lays it all out. Its not a very long document and its available from a number of differnet sources including the NACM and the Credit Research Foundation.
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Information on Chapter 7 Bankrupt
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