How to Choose the Right Bankruptcy Type

When thinking about filing for bankruptcy because of many unpaid debts, you are provided with two common options, Chapter 13 and Chapter 7. You should learn more about each one to determine the most effective debt solution for your finances. Call a legal representative to find out whether bankruptcy can help you. Make sure that you are working with the best agencies, such as ariano reppucci law offices.

  1. Chapter 7 bankruptcy. If you don’t own a lot of property or don’t want to keep your valuable assets and have many unsecured debts, like medical and credit card bills, it is your best choice. The basic reason is that most of your debt obligations will be discharged. However, you need to pass the means test to prove your eligibility for this chapter. It is used to determine whether you have enough income to pay back your debts. If you fail to qualify for this type of bankruptcy, think about Chapter 13. Some people call Chapter 7 liquidation or straight bankruptcy. That’s because all non-exempt assets are liquidated, sold, and distributed to credit companies. You should get a better idea of state exemptions to be aware of the assets you can keep when filing your petition. For example, they include your trading tools, personal possessions, and so on.small humans around the word BANKRUPTCY
  2. Chapter 13 bankruptcy. It is considered as the reorganization of your unpaid debts. This option is ideal for those debtors who experience only short-term financial problems and have enough time to pay off their loans. They will be provided with a break to reconsider their situation and find a way out. There are different reasons why people may opt for this bankruptcy type. If they are sick or experienced unexpected expenses, it can be an effective debt solution. You need to prove that you have a regular flow of income to avoid repossessing your property, such as a car. You will be provided with five years to pay back your debts. Think about the most beneficial repayment plan. The good news is that it doesn’t include any late fees and high interest rates.

Filing a bankruptcy petition is a serious decision, so that you need to consider all available alternatives first. Talk to your legal representative to ensure that you are making the right choice. This professional will advise you the best route to go based on your income, assets, and other financial matters.

Comments are closed.