Reasons to file for Chapter 7 bankruptcy instead of Chapter 13


Share post:

Many people choose Chapter 7 bankruptcy over Chapter 13 when they have the option. This is because it eliminates most of their medical debt and credit card debt. We will be discussing the benefits of Chapter 7 as well as the drawbacks of Chapter 13.

Must Read:

Chapter 7 Bankruptcy: Advantages

We will discuss the many benefits of Chapter 7 bankruptcy. However, Chapter 7 bankruptcy is not for everyone. An income test (also known as the “means test”) must be met to qualify for Chapter 7. For some, the debt can be discharged in return for valuable assets that are not exempt. These assets are sold by a bankruptcy trustee to pay creditors. Chapter 7 can sometimes be called “liquidation” bankruptcy.

You should carefully weigh the pros and cons for each chapter 7 bankruptcy and Chapter 13 bankruptcy. Many bankruptcy attorneys offer free consultations to help you choose which bankruptcy case to file.

You get a “Fresh start”

Chapter 7 bankruptcy is designed to help you get a fresh start. You are exempted from any personal liability for certain debts that you have eliminated.

Never Miss:

Some types of debt, however, are not able to be discharged, such as student loans (unless the court rules differently), child support, alimony, and fraud-related debts.

After Chapter 7 bankruptcy, certain liens remain on property such as a lien on a mortgage, tax lien or mechanic’s lien.

You will keep future income

The bankruptcy estate does not include any property that you acquire or plan to acquire after filing Chapter 7.

These types of property that were acquired within the first 180 days of filing for Chapter 7 bankruptcy will be included in the bankruptcy estate.

Also Read:

  • Inherited property
  • Property acquired as part of a settlement or divorce agreement
  • Death benefits
  • A life insurance policy proceeds
  • There are no limits on the amount of debt you can carry

Chapter 7 bankruptcy rules don’t limit the amount you can have, unlike Chapter 13 bankruptcy. Chapter 13 prohibits you from filing for bankruptcy if your secured or unsecure debt exceeds the debt limit.

No debt repayment plan

Chapter 7 does not require you to repay debt under a court-approved repayment program, as opposed to Chapter 13 bankruptcy. After Chapter 7’s discharge, you are no longer responsible to repay the debt.

Most Popular:

Rapid Discharge of Debts

The typical discharge of debt can occur in three months. The court will issue a discharge or order 60 to 90 days after your bankruptcy filing. The bankruptcy court will close your case after the trustee has distributed your property to unsecured creditors.


Must Articles


Related articles

Navigating the Intricacies of Corporate Law: A Comprehensive Guide

Hey there! Are you curious about the ins and outs of corporate law? Well, you're in the right...

Hyatt Legal: Navigating the Complexities of Legal Aid

We've all heard the phrase, "Better safe than sorry," right? Well, in the legal world, 'being safe' often...

What to Expect When You Hire an Attorney: From Consultation to Conclusion

Navigating the legal world can feel like trying to decipher ancient hieroglyphics. However, by knowing what to expect...

How to Protect Your Intellectual Property: A Guide for Businesses

We've all heard the old saying, "An idea is a dime a dozen." But let's face it, in...

Tips for Choosing the Right Litigation Lawyer

London boasts many experienced litigation law practitioners that specialize in litigation law. These may cover areas such as...

Landlord fines: Big penalties for unlawful landlords

Landlords have the responsibility of assuring tenant safety while also adhering to all relevant laws and regulations; unfortunately,...

Wimbledon 2023 Day 3 Predictions

Alex Mann has returned with his daily Wimbledon writings and predictions, including day three results of Wimbledon 2023....

The Power of Mediator Law in Resolving Conflicts

Flexibility and Adaptability of the Process Mediation can be tailored to meet the unique needs of parties to craft...

3 Inspiring Insights on Fintech Businesses Growth in Lithuania

Lithuania has become a hub for fintech businesses, and there are several reasons why. Among the main ones...

7 Tips for choosing an immigration lawyer

7 Tips for choosing an immigration lawyer The US immigration process is complex and can be extremely taxing. The...

3 Essential Steps of Researching and Comparing Law Firms

Choosing the right law firm can be daunting, especially if you face a legal issue for the first...

5 Advantages of Working With a Real Estate Lawyer

5 Advantages of Working With a Real Estate Lawyer Your real estate attorney is the person who always puts...