Unless you are a bankruptcy attorney or in another profession that routinely deals with bankruptcy matters, then you may not know the fundamental differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy.
The purpose of this blog is to focus on Chapter 7 bankruptcy and inform you of some of the advantages it offers over Chapter 13 bankruptcy.
Why Might Chapter 7 Bankruptcy Be the Best For Me?
The following are some of the advantages to filing for Chapter 7 bankruptcy, rather than Chapter 13 bankruptcy:
- Short duration
It is generally much quicker than Chapter 13 bankruptcy. Chapter 7 tends to begin and end within three to six months. This also means you could begin rebuilding your credit sooner than you would be able to do under Chapter 13, in most cases.
- Keep most or all of your property
You can usually keep your property, or at least most of it. One exception is if you declare the property as collateral for a loan. This generally applies to vehicles or homes.
- Debt-free, except for nondischargable debts
Unlike the Chapter 13 repayment plans, you will not have to pay back a portion of the debt you owe. This means you are debt-free, except for nondischargeable debts such as student loans, unpaid child support and other nondischargable debts.
Can Anyone Apply for Chapter 7 Bankruptcy?
You can file for a Chapter 7 bankruptcy if your median income is below your state’s bankruptcy means test. If it is above that means test, then you will likely be disqualified from applying for Chapter 7 bankruptcy; although, you may still be able to qualify depending on your disposable income. If you do not qualify for Chapter 7 bankruptcy, then you may be eligible for a Chapter 13 bankruptcy, which has its own distinctive advantages.
Everyone’s economic situation is different. Therefore, you should consult an experienced bankruptcy attorney from your state, so that he or she can find the best debt relief solution for you.
[Did You Know? Medical expenses, job loss and divorce are leading causes for Chapter 7 bankruptcy filings.]
Law Firm of Kevin D. Judd – Maryland and Washington DC bankruptcy attorney