Bankruptcy Law, Timothy Kingcade Posts

Reasons to File for Chapter 7 Bankruptcy Instead of Chapter 13

If you have decided that bankruptcy is the right solution for your financial situation, the next step is to determine which type of bankruptcy is best.  If you are an individual or small business owner, your most obvious choices are either a Chapter 7 or Chapter 13 bankruptcy.

Below are some of the key advantages associated with filing Chapter 7 bankruptcy:

  • Get a fresh start! The goal of Chapter 7 bankruptcy is to wipe the slate clean of all past debts (this excludes certain debts such as student loans, child support, alimony, taxes and debt incurred by fraud), giving the debtor a fresh start.    As opposed to a Chapter 13 bankruptcy, debts are forgiven without any attempt at repayment.
  • Keep future income. The property a debtor acquires after filing for Chapter 7 is not included in the bankruptcy estate.  This excludes property a debtor acquires within 180 days after filing for Chapter 7.  This rule applies to inherited property, property from a divorce or settlement agreement, death benefits or proceeds from a life insurance policy.
  • No limits. As opposed to Chapter 13 bankruptcy, Chapter 7 bankruptcy does not impose a limit on the amount of debt a filer may have.
  • Quick process. In most cases, Chapter 7 clients can receive a complete discharge of all of their debts in as little as three months.
  • NO repayment plan. Unlike Chapter 13 bankruptcy, the debtor does not have to repay debt in a court-approved repayment plan.  After receiving a Chapter 7 discharge, the debtor is no longer responsible for repaying the debt.

It is important to know that Chapter 7 bankruptcy does require a debtor to pass the “means test,” which determines whether your income is low enough to file.   The means test was designed to limit the number of Chapter 7 filers to those who truly cannot afford to pay their debts.  However, you can earn significant monthly income and still qualify to file for Chapter 7 if you have a lot of expenses, such as high mortgage payments, car loans, medical debt, taxes and other related expenses.

If you have any questions on this topic or would like to know which bankruptcy option is best for your situation, contact an experienced Miami bankruptcy attorney .  As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at

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