There are a plethora of reasons why filing Chapter 7 bankruptcy is going to be a lot better for you than filing Chapter 13. Chapter 7 is typically a lot faster than Chapter 13 is, you will usually get to keep most of your property, and you never have to pay back a portion of the money you owe. If you were to file Chapter 13 you would be paying back some of what you owe. Unfortunately, just because Chapter 7 is the more desirable option does not mean that you are always going to qualify for it.
Advantages of Chapter 7
Typically a Chapter 7 bankruptcy case is going to be opened and closed between three and six months. The person who files Chapter 7 will almost always come out at the other end debt-free with the exception of car payments, mortgages, student loans, and other secured debts. While it is possible for someone to lose property while filing Chapter 7, it is not something that happens often.
Naturally, there are certain requirements that must be met in order for you to qualify to file Chapter 7. If the income you earn is more than enough to commit to a Chapter 13 payment plan after the amount of money you spend making monthly payments on your bills and other allowed expenses such as child support and secured debts you would not qualify for Chapter 7.
What Is Chapter 13?
Chapter 13 is technically still filing bankruptcy. The only difference is that you would be filing to get set up with a payment plan. The payment plan is going to give you 3 to 5 years to pay off the debt you owe. The judge will help set up a payment plan that you can pay based on your current income. As long as you can keep up with these payments you would not receive any calls from debt collectors for the next 3 to 5 years.