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Filing for Chapter 7 Bankruptcy: The Pros and Cons

Many people have experienced financial hardship and have had to consider declaring bankruptcy. If you have found yourself in this situation, then you need to know the pros and cons of a Chapter 7 bankruptcy versus Chapter 13. A Chapter 7 bankruptcy is known as a “liquidation bankruptcy,” and while it is always best to consult with a Chapter 7 attorney in West Palm Beach, FL, to get the full picture of your individual situation, here are the larger considerations.


It’s Less Expansive Than Chapter 13 – The costs of filing Chapter 7 are generally much less compared to filing under Chapter 13.

Speed of a Chapter 7 Discharge – A no-asset Chapter 7 case is usually completed in under six months after filing the Chapter 7 petition. This means most of your unsecured debts may be eliminated in under 180 days.

You Can Potentially Keep Property – Many people who file a Chapter 7 get to keep all their property, but a Chapter 7 attorney will explain that there are some who do not.

It Stops Debt Collection Lawsuits – Filing Chapter 7 stops the lawsuits of creditors who may be suing you. If the debt is eligible for a discharge, the lawsuit cannot resume, and you get rid of the debt.


Income Requirements – Chapter 7 has specific income requirements to qualify for a bankruptcy discharge under this chapter of bankruptcy. There is a means test, and if your income exceeds the median income for your state, you may not qualify for discharge in Chapter 7.

Non-dischargeable debt – A Chapter 7 attorney can explain that some debts are not dischargeable in bankruptcy, including most student loans and taxes. Child support, marital alimony, some judgments, and most government debts are also not dischargeable in bankruptcy.

Negative Credit Impact – Your credit score may be negatively impacted, and the Chapter 7 remains on the credit report for ten years.