ACCC Explains The Pros And Cons Of Filing For Bankruptcy

ACCC explains what every consumer should consider before filing for bankruptcy

Boston, MA – July 10, 2017

Pros and Cons of Filing for BankruptcyIn a financial crisis, most believe their options are limited and undesirable. Filing for bankruptcy is an option that has advantages, and most importantly offers the opportunity for a fresh financial start. On the one hand, if a consumer is eligible, most of their unsecured debts may be forgiven or discharged. On the other hand, bankruptcy can remain on a consumer’s credit record for seven to ten years, affecting their future finances. National nonprofit American Consumer Credit Counseling explains the pros and cons of filing for bankruptcy and highlights what every consumer should consider before making a decision.

Bankruptcy is a proceeding in a federal court in which an insolvent debtor’s assets are liquidated and the debtor is relieved of further liability. Chapter 7 deals with liquidation, while Chapter 13 deals with reorganization.

“Bankruptcy is designed to help the consumer survive financially,” said Steve Trumble, President and CEO of American Consumer Credit Counseling, which is based in Newton, MA. “It’s important that consumers learn about the benefits and drawbacks so they can decide if filing for bankruptcy is the right option for them. The advantages only go so far; bankruptcy does not necessarily eliminate all debts, and often simply restructures existing debts, leaving you responsible for all future payments.”

According to National Bankruptcy Forum, there were 794,960 bankruptcy filings for the 12-month period ending Dec. 31, 2016. Of those, 490,365 were Chapter 7. The number of bankruptcy filings in the 2016 calendar year was the lowest for any calendar year since 2006. While it’s also the sixth consecutive year that bankruptcy filings have fallen, 2016 saw the decline at its slowest — 5.9 percent for the year.

American Consumer Credit Counseling explains the pros and cons of filing for bankruptcy (


  1. One of the most important advantages of filing for bankruptcy is that you can obtain a fresh financial start.
  2. If you are eligible for Chapter 7 most of your unsecured debts may be forgiven or discharged. A secured debt is one which the creditor is entitled to collect by seizing and selling certain assets of the debtor if payments are missed, such as a home mortgage or car loan.
  3. You may be able to keep (that is, exempt) many of your assets, although state laws vary widely in defining which assets you may keep.
  4. Collection efforts must stop as soon as you file for bankruptcy under Chapter 7 or Chapter 13.
  5. You cannot be fired from your job solely because you filed for bankruptcy.


  1. A bankruptcy can remain on your credit record for 7-10 years and can affect your future finances.
  2. A bankruptcy may impede your chances of getting a mortgage or car loan for some time.
  3. Not all debt will be discharged. Examples of debt that cannot be discharged include: child support, alimony, some student loans, divorce settlements and some income taxes. You should check with an attorney on the specific categories of debt that will be allowed for discharge.


ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:

  • For credit counseling, call 800-769-3571
  • For bankruptcy counseling, call 866-826-6924
  • For housing counseling, call 866-826-7180
  • Or visit us online at

About American Consumer Credit Counseling

American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit management counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education. Sometimes the best possible debt solution for consumers is bankruptcy. ACCC is approved by the Department of Justice to provide the mandated pre-filing bankruptcy certificate for completed counseling and the post-bankruptcy debtor education certificate that is necessary for bankruptcy to be discharged. ACCC’s certified credit advisors work with consumers to help them determine the best plan of action to get out of debt and regain financial stability. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free personal finance resources, log on to or visit