If filing a bankruptcy is unavoidable, what type of bankruptcy should you file for? Basically, you have a few options to discharge your debt, but the most common form of debt relief is filing under Chapter 7 bankruptcy. It is a highly recommended option for those who truly want a fresh financial start in a shortest period of time. This article will explain the reasons why you should file under this type of bankruptcy for a debt relief.
Basically, a person has 2 options of bankruptcy filing, either chapter 7 or chapter 13. The advantage of chapter 7 over chapter 13 is it allows many, if not all, of your debt to be cancelled outright in a short 3 to 6 month process to get an immediate debt relief, compares to chapter 13, which may take 3 to 5 years for you to completely enjoy a debt free life. But, you may not qualify to file under chapter 7 if you have income to make payments on your debt.
In order to be qualified under chapter 7 bankruptcy filing, you have to prove that you have little or no assets with your name. What you can do to qualify for chapter 7 is by relinquishing the ownership of you assets to your family members. You have to do this with a legal bill of sale form so that you can prove that you are no longer own the assets and to avoid your creditors from stake claim on those assets.
However, not all debts can be discharged with chapter 7, such as federal student loans and alimony. If your overwhelming debt is under these categories, then you will not be able to benefit from the advantages of Chapter 7 because you have to file under chapter 13.
If you are qualified to file a bankruptcy under chapter 7, you should consider this option if you have no other way to get rid of debt. As the filing process takes 3 to 6 months, by going this route to discharge debt is the fastest way to get rid of debt once and for all and get you free from the stresses caused by the overwhelming financial burdens. Since bankruptcy is a destructive way of debt relief, your credit score will be badly impacted, you have to rebuild your credit after the discharge. So, the earlier you can get out of debt, the faster you can rebuild and restore a good credit score. Therefore, you should always consider on filing a chapter 7 bankruptcy because it is the best route for you to get rid of your debt in the shortest time and you can always start to rebuild credit after the completion of discharge.
Chapter 7 is a more favourable form of bankruptcy filing seeing its advantages over chapter 13, but it has tighter eligibility requirements. You should always try to file a discharge under chapter 7 if bankruptcy is an ultimate option for you to get rid of debt.