If you are starting the bankruptcy process, you likely are trying to figure out if you should use Chapter 7 or Chapter 13 to file for bankruptcy. While both can be advantageous in their own ways, here is why you'll want to pick Chapter 7 bankruptcy instead of Chapter 13 if you have the option.

Chapter 7 Offers a Faster Fresh Start

When you compare the two forms of bankruptcy, know that your debts will not be discharged with Chapter 13 until you complete the repayment plan. However, this repayment plan can take several years to complete, and only then will your debts be discharged. Chapter 7 bankruptcy can help get you to where you want to be much faster, since assets are liquidated, that money goes to pay towards as many debts as it can, and the rest is discharged.

Chapter 7 Has a Higher Success Rate

One of the things that you may not hear about with Chapter 7 is that it has a much higher success rate than Chapter 13 bankruptcies. In fact, 95% of people that use Chapter 7 bankruptcy have their debts successfully discharged. When compared to Chapter 13, the success rate ranges between 40% and 70%. Part of the lower success rate is due to the repayment plan, and having to make every single payment. People that end up missing payments will have Chapter 13 bankruptcy fail, which puts you right back at the beginning with having to deal with your debts.

Chapter 7 Is More Affordable

If you need to use bankruptcy to get out of debt, chances are that you do not have much cash on hand to begin with. This means that you also need to consider the cost of using either form of bankruptcy. Since Chapter 13 is more complicated than Chapter 7, it means that Chapter 13 ends up costing you more money in legal fees. While it is only the difference of a couple thousand dollars, it can still be prohibitive when deciding to use bankruptcy. 

Still do not know which form of bankruptcy you should use? Reach out to a bankruptcy lawyer in your area for a consultation? They can take a closer look at your finances to make a recommendation for which form of bankruptcy will work best for you. They will then tell you the first steps that you need to take to get the ball rolling towards a financial fresh start.