Which Bankruptcy Should I File?
Chapter 7 bankruptcy and Chapter 13 bankruptcy both have their advantages and disadvantages. If you are thinking about filing for bankruptcy, you will need to verify if you qualify for both as well as which one you would like to apply for. There are quite a few steps that you can follow to help you compare Chapter 7 and Chapter 13 bankruptcy and decide which one is right for you.
The first is read the table below, the second step is to contact us to further verify.
| Chapter 7 | Chapter 13 |
|---|---|
Chapter 7 is mostly used when: |
Chapter 13 is mostly used when: |
| You have little property except for the basic necessities like furniture and clothing | You have significant equity in a home or other property and you want to keep it |
| You have little or no money left after paying basic expenses each month-or you're not even meeting basic expenses | You have regular income and can pay your living expenses, but you can't keep up the scheduled payments on your debts |
Advantages of Chapter 7: |
Advantages of Chapter 13: |
| Most unsecured debts can be discharged (completely eliminated) | You can keep most of your property while spreading out time to pay past due accounts |
| The process moves quickly-you may receive your discharge in just a few months | You'll have 3-5 years to catch up delinquent accounts-according to a schedule that you and the bankruptcy trustee have agreed is workable for you. |
| Creditors can't contact you while the automatic stay is in effect-or after debts are discharged. | You'll make one monthly payment to the bankruptcy trustee for distribution-you'll have no direct contact with creditors during the protection period of 3-5 years. |
Who should File Chapter 7? |
Who should File Chapter 13? |
| Debtors who have qualified under the 'means test' and completed a required pre-filing session with a credit counselor may file for Chapter 7 bankruptcy protection. | Any individual debtor whose unsecured debts are below $336,900 and whose secured debts are less than $1,010,650. |
Need help determining whether Chapter 7 or Chapter 13 bankruptcy may make more sense for you? If so, feel free to contact us and we will explain and try to help as much as possible.