Filing bankruptcy is never a welcomed situation, but it’s important to remain focused on the positive. After all, bankruptcy exists to help people get the relief they need during a rough time. However, before you file and actually get that relief, you’ll need to decide which chapter is right for you. One of the most popular choices is a chapter 7.
For one thing, chapter 7 bankruptcies guarantee you the quickest process. Most people can’t wait to have this part of their life behind them. For them, then, it might make sense to file a chapter 7. The other popular option, a chapter 13 bankruptcy, can last up to five years and no less than three.
With the exception of student loans and taxes, essentially all your unsecured debt will be discharged upon filing a chapter 7 bankruptcy. This means you won’t have to pay them back at all and there’s no plan to adhere to. With a chapter 13, you’re generally required to pay back at least some of these debts.
The money you make after filing bankruptcy is generally all yours too. When you file a chapter 13, the money you receive in the six months that follow is generally considered property of your bankruptcy. With a chapter 7, the emphasis is on the money you earned in the six months prior to filing.
Although chapter 7s generally focus on liquidating what you can to pay off creditors as soon as possible, that doesn’t actually mean you automatically lose assets. There are exemption laws at play that mean you can protect a lot of what you own. This is where having a qualified bankruptcy attorney helping you can make all the difference. Otherwise, a chapter 7 could end up with you owning less property.
If you want the quick and painless route to getting out of a tough financial situation, filing a chapter 7 may be the right move.