What are the Major Advantages to Filing a Chapter 7 Bankruptcy?

The major advantages to a Chapter 7 bankruptcy is that it is a very quick and inexpensive Bankruptcy.  A Chapter 7 is common for persons that have not recently filed bankruptcy, that have very little equity in assets, average or below average income and a majority of unsecured debt. 

The Debtor pays an upfront but  much smaller attorney fee in a Chapter 7 bankruptcy.  Most Chapter 13 cases pay about 3,000 in attorney fees.  However these fees are subtracted from what is paid to creditors.  An individual Chapter 7 will normally cost about 1000 and 1200 for a couple in attorney fees. 

The major restriction is that a Chapter 7 can only be filed once every 8 years to obtain a Chapter 7 discharge.  If you have filed a Bankruptcy previously please refer to the Chapter 7 and Chapter 13 time chart for re-filing and tell your attorney.  Consumer Debtors have to qualify under the means test and must have no disposable income for a Chapter 13 payment after the deduction of reasonable and necessary expenses.  If a Chapter 7 debtor has disposable income that allows a 185 dollar  monthly payment which repays 10% of the unsecured debt a Chapter 13 must be filed.      

Chapter 7 has a very high success ratio while Chapter 13 cases often have to be converted to a Chapter 7 later if the debtor losses income due to death, disability or divorce.