• There are several disadvantages to filing for Chapter 7 bankruptcystack of cash image by jimcox40 from Fotolia.com
  
  If your debts pile up to the point where there appears to be no way out, your only alternative may be to file for bankruptcy. The most common type of personal bankruptcy is Chapter 7, also known as straight bankruptcy, where the debtor's assets are liquidated and no further repayment is required. While Chapter 7 may relieve you of many of your debts, it is not without its disadvantages.
  
  

Ruined Credit

• A bankruptcy can remain on your credit report for up to 10 years, making it difficult to borrow money or even get a job, although the effects may lessen as more time passes. Even if you are able to secure a loan, you will most likely pay much higher interest rates than someone with a favorable credit history.
  
  

Not All Debts Are Forgiven

• Chapter 7 does not forgive every type of debt. You will still be responsible for repaying student loans and it won't relieve your obligation to pay alimony and child support. If there is a lien against your property for items such as back taxes, it is likely that bankruptcy will not remove this obligation.
  
  

Loss of Possessions

• Bankruptcy may not protect valuable possessions and luxury items. While you may be allowed to keep your home and car, you may be ordered to turn over items like jewelry and art to satisfy creditors. However, you will be allowed to keep any property you acquire after filing for bankruptcy. You'll probably have to pay for new acquisitions in cash because you will have to give up your credit cards.
  
  

Future Filing Difficulty

• Once you file for bankruptcy, it can be difficult to file again in the future. You will need to wait six years before filing again, meaning you may not be able to seek relief if you incur more financial difficulties in the meantime. If your bankruptcy case is dismissed because you violated a court order, you will have to wait another 180 days before you can file again.
  
  

Stigma

• Filing for bankruptcy can be a source of embarrassment, especially if it becomes public. It can be difficult to try to explain your situation to friends, family and business associates. You also will have to explain how you got into the financial mess in great detail to the bankruptcy trustee who handles your case.