As you review your personal finances, it’s your hope that you like everything you see. Unfortunately, this doesn’t always happen. In fact, things may be so bad that you begin to consider bankruptcy.
There are a variety of benefits associated with a Chapter 7 bankruptcy filing, including but not limited to the following:
- A fresh start: The primary goal of Chapter 7 bankruptcy is to receive a fresh financial start. Through the discharge of certain debt, such as those associated with credit cards, you’re able to bring your finances back to ground zero. This gives you the opportunity to build the life you’ve always wanted.
- No repayment plan: This is the big difference between Chapter 7 and Chapter 13 bankruptcy. With Chapter 7 bankruptcy, there is no repayment plan. The process typically takes four to six months, and upon completion you can move on with all your future income. But with Chapter 13, you’re required to repay some or all of your debts through a repayment plan, which lasts anywhere from three to five years.
- It’s fast: The discharge of debts in Chapter 7 bankruptcy typically occurs within two to three months of filing. In other words, there’s an end in sight. But as noted above, Chapter 13 bankruptcy is not nearly as fast, as your repayment plan will last a minimum of three years.
- No debt limitation: Chapter 7 bankruptcy does not have a limit on the amount of debt you can have. But with Chapter 13, there is a debt limit both for unsecured and secured liabilities.
Whether or not you file for Chapter 7 bankruptcy is one of the biggest financial decisions you’ll ever make.
Even though there are benefits, it doesn’t necessarily mean it’s the right strategy for you. You can’t make a sound decision until you understand the finer details of Chapter 7 bankruptcy and how they’ll impact your finances.
If you’re ready to file for Chapter 7 bankruptcy, take the time to get everything in order. For instance, you should collect bank statements, tax returns, loan statements and pay stubs.
Once you have everything you need, it’s time to take action. Within six months, the Chapter 7 bankruptcy will be complete and you’ll be on your way.