We all know that Bankruptcy is a kind of relief for the debtors who cannot control their finance and want to get relief from the collection agencies. But Bankruptcy will hurt your credit negatively to a great extent. In fact bankruptcy is the blackest mark that you can have on your credit report. We know that foreclosure affects the credit report so much but bankruptcy will also affect your credit.
If a debtor is approved to file Bankruptcy Chapter7 then almost all his debts will be dischargeable. In that case all the non-exempt properties of the debtor will be sold to pay off his creditors. It is an effort to give a change to the debtors to start fresh. But before filling bankruptcy chapter7 you need to know what are your non exempt properties; otherwise you may loose your valuable properties. So it is better to consult with a financial advisor before filing Bankruptcy chanpter7.
Once you file Chapter7 bankruptcy, it will show in your credit report for next 10 years. It will also drop your credit score by 250 to 300 points. So the bankruptcy chapter7 should be the last option to choose to get out of the financial mess. After filing the chapter7, the person may not be approved for any loans for almost 5 years. So the thing is that after filing chapter7, it may seem that all is lost but it is not the end of the world. Better we should start fresh and try to improve the credit so that it is possible to get approved for loans in near future if need.