What are some pros and cons involved with filing for bankruptcy?

Bad Credit is not a reason to file for Bankruptcy. Bankruptcy depends on not only the amount of your debt, but your ability to pay back this debt.

The second answer is correct as to Student Loans. They are no longer dischargeable in a Chapter 7 or Chapter 13 Bankruptcy(the two most common types). There is a provision for "Extreme Hardship". However for this it requires an additional hearing. At that hearing you have to prove that even after your other debts are discharged you can not maintain a minimum standard of living, and that the prospect for this in near future is not feasible. The judge would decide if you are allowed to discharge All/Part of it, or not allow it at all.

Unless this 25% unpaid debt you have is a large amount it does not sound like Bankruptcy is a good option for you right now. But if you still want to see your option then talk to a BK lawyer in your area for a consultation. You can get into the specifics with them.

A bankruptcy is going to be on your credit report for 10 years. Now, the Credit Reporting Agencies generally take the view on Chapter 13 since it is a "repayment" they will remove it after 7 years.

If you are trying to get a low limit card for emergencies it might be a good idea to open up a savings account and save that money in there for now.

Student loans are no longer dischargeable in any chapter of bankruptcy unless you can prove that repaying the loan creates an undue hardship on you or your family.

Proving hardship usually requires showing that you can't provide a minimum standard of living for yourself and your dependents if you have to repay the loan. Some courts will discharge part of the loan on a showing that repaying it all would be a hardship.

Chapter 13 filing can provide a way to cure defaults on student loans, or to pay them off over the course of the plan.

The bankruptcy is on your record for 7 years -- it will hinder much of your financial transactions for that time period. It will be tough or really expensive to borrow money for a car, a house, etc. You won't be allowed to get a credit card while in the bankruptcy process and it will be tough to get one after.

It does, however, discharge much of your debt that is unsecured. I filed 5 years ago for Chapter 13, which is a debt restructuring. I would have rather NOT done it, but I had no choice. It has been tough going, but it was discharged two years ago and will be off my record in two more. Don't go into this lightly.

Sorry...student loans can't be discharged in a Chapter 7 BK filing....However, they can be included as part of a Chapter 13 filing....this is the type of BK where you pay back most of your loans....the advantage of Chapter 13 is that it can put a freeze on exorbitant interest rates on loans...It lets you consolidate all your debt and you pay it back under court supervision.

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