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What are some downsides to bankruptcy discharges?
The biggest downside is the impact on your credit that comes from filing for bankruptcy in the first place. It can take years to rebuild your credit, which is why it’s the last resort for many people.
You also must prove to the court that it’s necessary to discharge this debt. There are other requirements from the court, such as taking a financial management course before bankruptcy is granted.
Oftentimes, the court will liquidate nonexempt assets in order to pay off as much of the debt as possible before discharging the rest. These include non-primary residential properties, newer vehicles, and any other items of value (instruments, artwork, jewelry, etc.).
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