The decision to file for Chapter 7 bankruptcy is never an easy one. Even if you understand the pros and cons, you may still have some reservations about pushing forward. This is natural, as filing for bankruptcy is one of the biggest financial decisions you'll ever make.
Understanding the primary advantages of Chapter 7 bankruptcy will help you decide if it's the right decision for you at the present time:
- A new financial beginning: For the most part, Chapter 7 bankruptcy gives you the fresh start you've been looking for. In addition to eliminating some of your debts, it also gives you the opportunity to better understand the mistakes you've made in the past.
- No repayment plan: For some, the biggest issue with Chapter 13 bankruptcy is the repayment plan. This forces you to catch up on your debts over the course of three to five years. Subsequently, you have to give away almost all of your expendable income. Chapter 7 bankruptcy doesn't have a repayment plan component. Once the process is complete, you can move on without anything tying you down.
- No debt limit: With Chapter 7 bankruptcy, there is no limitation on the amount of debt you can have. This doesn't hold true with Chapter 13 bankruptcy, as there are limits both for secured and unsecured debt.
- It's fast: As long as you do your part along the way, the discharge of debt in Chapter 7 bankruptcy typically occurs within two to three months. Also, the process as a whole usually comes to an end within six months. This is in contrast to Chapter 13 bankruptcy in which a repayment plan remains in effect for a minimum of three years.
If these advantages have you strongly considering Chapter 7 bankruptcy, learn more about the process as a whole and the information you need to collect to proceed in Minnesota. Once you have everything in order, you can make your final determination.
Even if you don't file for Chapter 7 bankruptcy in the near future, it never hurts to understand what it can do for you.
Visit our website to learn more about Chapter 7 bankruptcy, your legal rights and the steps to take.