As you compare Chapter 7 bankruptcy to Chapter 13, you will have a lot running through your mind. First off, you must make sure you are eligible for Chapter 7 bankruptcy. If you are, you can then compare the pros and cons of both to decide what to do next.
Getting started means understanding the advantages of Chapter 7. Consider the following:
-- A fresh start. Through this type of filing, some of your debt will be discharged for good. This means that you are in position to start fresh, for the most part.
-- Ability to keep future income. Generally speaking, all the money you earn and property you acquire after bankruptcy is not included in the bankruptcy estate. Once again, this gives you the opportunity to start fresh.
-- No repayment plan. With Chapter 13 bankruptcy, you are required to pay debt through a repayment plan that lasts three to five years. With Chapter 7, this never comes into play. Instead, you have no obligation to repay past debt once it is discharged.
Final note: Chapter 7 bankruptcy can be a fast and efficient process, with debt often being discharged within two to three months of filing.
These are just some of the many reasons to choose Chapter 7 bankruptcy as opposed to Chapter 13. If you want to make a good decision, however, you owe it to yourself to examine the pros and cons of both options.
If you decide that Chapter 7 is the right decision, align yourself with a team of professionals who can help you move through the process.
Source: FindLaw, "Reasons to File for Chapter 7 Bankruptcy Instead of Chapter 13," accessed Aug. 30, 2016