Many people come to our office seeking debt relief, but they don’t know where to begin. There are pros and cons to both Chapter 7 and Chapter 13 bankruptcy filings, so it is important to understand them. Be sure to read our next blog titled “How Chapter 13 is Better than Chapter 7.” This blog will focus on the many benefits of a Chapter 7 case.
The Process is Faster
A typical Chapter 7 filing takes four to five months to complete, while a Chapter 13 lasts three to five years. This can be extremely beneficial if you have a large amount of debt to discharge because you can obtain your fresh start quicker and begin rebuilding your credit faster.
Eliminate Unsecured Debts
A significant benefit of the Chapter 7 process is that you can discharge medical bills, credit card debt and most loans that do not have assets pledged as collateral to the lender. This is often the majority of an individual’s debt.
Keep Your Assets
While the Chapter 7 procedure is commonly referred to as a “liquidation” case, most debtors don’t actually lose possession of their property in their filing. The law provides you with a wide variety of exemptions that safeguard valuable assets from being used or sold to pay your creditors. Common examples of exempted property includes your home, vehicle, 401k account, clothing and common household belongings. The reality is that the majority of Chapter 7 debtors are allowed to fully discharge their debts without losing any of their assets.
Because the Chapter 7 process does not last as long as the Chapter 13 process, it generally costs you less to file.
If you are interested in learning more about filing a Chapter 7 bankruptcy, contact one of our seasoned bankruptcy attorneys to schedule your appointment.