4 reasons why any chapter 7 bankruptcy attorney will always prefer this over chapter 13 | mumble in the jungle

4 reasons why any chapter 7 bankruptcy attorney will always prefer this over chapter 13


Considering the fact that debtors often lose property with a chapter 7 bankruptcy, it’s not surprising that it’s a topic that’s blighted with worries by a lot of people.

However, while the above is completely true, if one were to speak to most attorneys in the field it would become blatantly clear why this is the advisable course of action in the majority of cases, as opposed to the chapter 13 option. Chapter 7 bankruptcies have umpteen benefits, in most situations at least, and through the course of this guide we’ll take a look at some of the main ones in detail.

The fresh-start factor

If you’ve already contacted your chapter 7 bankruptcy attorney, you’ll probably be fully aware of this first benefit over the alternative.

One of the main reasons why the chapter 7 option is preached so much is due to the fact that you can gain a fresh start. In other words, all of the existing debt will have been eliminated – and you no longer have to worry about them.

Of course, some debts are not included within this. Student loans fall into said category and generally, unless the court tells you otherwise, you will still have to repay this.

Repayments are no longer required

This next benefit is in stark contrast to the chapter 13 option, where a repayment plan will be put together to ensure that you have to cover some of the debts that have been built up.

In the case of chapter 7, no such plan will exist. The courts aren’t going to put together any sort of repayment plan, meaning that any responsibility for these debts is immediately quashed upon the judgement.

There are no debt limits

Something else that is often discussed in relation to chapter 13 is the amount of debt that you are allowed to take to the court. Many people find that they have just accumulated too much debt to qualify – and this is where chapter 7 enters the picture.

Under this arrangement, there are no limits in relation to the debt that you may have amassed. Suffice to say, it immediately means that this form of bankruptcy is opened up to a much larger group of people.

To throw some hard and fast numbers into the equation, you won’t be eligible for a chapter 13 bankruptcy if your unsecured debt is more than $336,900, or if your secured debt is more than $1,010,650.

It’s a quick process

Even though the chapter 7 approach is seemingly riddled with positives, it’s still not a process which takes a prolonged period of time. Generally, the debt will be discharged in around three months after you have applied for bankruptcy. In other words, by the time that this period of time lapses, you will have achieved your fresh start and you will be able to rebuild your life.

As we’ve already touched upon, as a repayment plan is in place with the chapter 13 option, such a quick process doesn’t exist.