1. You Qualify For Chapter 7.
Statistically, over 70% of all bankruptcies filed in the United States are Chapter 7 filings. This is not a coincidence, especially when you consider the many benefits of a Chapter 7 however you must qualify and this often requires that you pass the complicated Means Test.
2. You Eliminate Unsecured Debt.
Chapter 7 is intended to assist debtors who simply cannot repay their unsecured debts. Upon discharge, their debt is eliminated forever without any further legal obligation to repay them. Moreover, creditors are forced to accept their discharge and cannot attempt further collection efforts.
3. You Recently Experienced Unemployment or Medical Event.
Bankruptcies due to medical bills have increased almost 50 percent in a six-year period, from 46% in 2001 to 62% in 2007, and most filed by middle-class, well-educated homeowners, according to The American Journal of Medicine. “Unless you’re a Warren Buffett or Bill Gates, you’re one illness away from financial ruin in this country,” Steffie Woolhandler, M.D., of Harvard Medical School.
4. You Have Non-Exempt Assets.
Contrary to the popular misconception that a bankrupt person is thrown out of his house with nothing but the close on his back, most people actually keep all of their household furnishings and personal property. They can also keep their home and vehicles depending on the amount of equity each asset that exists and whether they can afford to continue payment. The difficulty is determining what assets you can keep and claiming those assets properly to ensure that you can in fact keep them.
5. You Can Still Keep Your Home.
Chapter 7, like chapter 13, allows debtors to keep their homes. California has two exemption categories that you can take advantage of depending on the amount of equity in your home. If you can maintain your mortgage then you may be able to keep your home and eliminate your unsecured debts, the best of both worlds.
6. You Can Finish Faster.
Chapter 7 allows you to finish your bankruptcy in only a few months, typically about 90-120 days from the day of filing. This is a blink of an eye compared to the Chapter 13 3 to 5 year repayment plan.
7. You Can Save Money.
Chapter 7 will save you thousands of dollars in Attorney’s Fees and Trustee’s Fees over the period of the plan.