Filing a bankruptcy claim can be a very stressful procedure, specially when you do not really know what chapter to file for. And now with the new law, some individuals will not even have the chance to choose, they will either qualify for both chapters or just for Chapter 13. The idea behind this measure is to prevent wealthy families from filing for Chapter 7: now their options are limited. But those lucky ones who do have the chance to make a choice, are at a loss.
This article seeks to become a guide for those who are more inclined to file for Chapter 7. Here we will discuss the advantages this chapter has over the second most common chapter and the obvious disadvantages related to the latter. Enjoy!
Wonders Of Chapter 7 Bankruptcy
Chapter 7 is the most common type of bankruptcy and it is filed by most debtors when in need. But what is it about this specific bankruptcy type which makes it so appealing to most debtors? Well, first of all, its simplicity. It is easy to file and quick as you would not believe. We live in a fast turning world in which rapidness is a very valuable feature. For you to have an idea of how fast this claim can be, an average case takes between four to six months in being closed! No wonder why this chapter is so popular, huh?
Before getting your hopes up, you should know that not all types of debt can be discharged or wiped off your credit report. But this does not have much to do with the type of chapter you are going to file (there are some exceptions). Some debts cannot be written off at all, these are, for example, tax related debts, some types of student loans (usually those owed to the state), child support debts, spouse maintenance debts, etcetera.
Downside Of Chapter 13 Bankruptcy
We all know that the disadvantages of an object or a procedure cannot be counted as advantages of another, but in this case, I will make an exception. It is undeniable that Chapter 13 carries many advantages to it and has worked wonders for many debtors, but of course it depends on your particular situation.
In Chapter 13 bankruptcy, as opposed to Chapter 7, debts have to be paid off. There is no way around this. Repayment plans are planned out and debtors must stick to it in order for their debts to be discharged (once completely paid off, of course). These repayment plans may last up to five years. As discussed before in this very same article, time is a very important issue for many individuals, and having to put up with a bankruptcy case for such a long time might not appeal to a lot a debtors, specially if they are in need of a fast fresh start.
To Sum Up
Contrary to what you must think, I do not lean towards any of the two chapters. I believe it is a very personal decision which must be thought over carefully in order not to make mistakes you might regret in the future. This is not a issue which should be taken lightly. In any case, get advice from a lawyer: there is nothing better than discussing your options with a professional.
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