Filing for Chapter 7 bankruptcy is a big decision, as it will impact your finances now and for many years to come. However, if you’re buried in debt and searching for a way out, you may realize that this is the best way to take immediate action.
Here are the many advantages of Chapter 7 bankruptcy:
- It’s fast: While not always the case, the discharge of debt in a Chapter 7 bankruptcy case typically occurs within two to three months. So, it won’t be long before you have some breathing room. Also, the entire process only takes five to six months, which isn’t bad when you consider everything that will happen during that time.
- A fresh start: Thanks to the discharge of many types of debt, you’re able to secure the fresh start you’ve been dreaming of. Not all types of debts are dischargeable, such as student loans, but many are. For example, if you have a lot of credit card debt, you can eliminate it in Chapter 7 bankruptcy.
- All future income is yours to keep: When compared to Chapter 13 bankruptcy, this is a top advantage. You don’t have to use future income to repay creditors, which positions you to better manage your finances down the road.
- No debt limitation: It doesn’t matter how much unsecured or secured debt you have, as this doesn’t come into play in Chapter 7 bankruptcy. However, with Chapter 13, there are limits on how much debt you can have.
These are just a few of the many advantages of filing for Chapter 7 bankruptcy.
If these excite you, compare them to the potential disadvantages to ensure you’re making the right decision. For example, a Chapter 7 bankruptcy will remain on your credit report for 10 years, which can hinder your ability to secure a loan for a home or car.
As you compare the pros and cons of Chapter 7 bankruptcy, you’re likely to find that the benefits outweigh the drawbacks.
Once you’re comfortable with what Chapter 7 bankruptcy can do for you and the process as a whole, you can take the first step in filing.