You hope that your finances will always remain in good standing, but there could come a time when you have no choice but to think long and hard about Chapter 7 bankruptcy.
There are many reasons to file for Chapter 7 bankruptcy, including the following:
- A fresh start: It's hard to start fresh in regards to your finances, but filing for Chapter 7 bankruptcy will allow you to do just that. It may not eliminate all your debt, but it will get you as close to "square one" as you have been in a while.
- Power to keep future income: With Chapter 13, you have to use some of your future income to satisfy debts through a repayment plan. You don't have this requirement when it comes to Chapter 7 bankruptcy.
- No limit on how much debt you can have: This is a big deal, as some people find that they have too much debt to qualify for Chapter 13 bankruptcy.
- A fast process: It's hard to say exactly how quickly things will take shape, but a Chapter 7 bankruptcy discharge typically occurs within 60 to 90 days of filing.
There are other reasons to file for Chapter 7 bankruptcy, but these are typically the ones that push people in this direction.
If you come to find that this is the best way to improve your finances, you'll want to learn more about every pro and con. Also, focus on the process and your legal rights, so that you know what to expect at every turn of the road.
Source: FindLaw, "Reasons to File for Chapter 7 Bankruptcy Instead of Chapter 13," accessed June 05, 2018