Which Bankruptcy Chapter to File?

Below is a list to help determine what chapter to file

Chapter 7 Is Commonly Used When:

  • You have little property except for the basic necessities like furniture and clothing
  • You have little or no money left after paying basic expenses each month – or you’re not even meeting the basic expenses.

Advantages of Chapter 7:

  • Most unsecured debts can be discharged (completely eliminated)
  • The process moves quickly – you may receive your discharge in just a few months
  • Creditors can’t contact you while the automatic stay is in effect – or after debts are discharged.

Who Can File Under Chapter 7?

  • 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.

Chapter 13 is Commonly Used When:

  • You have significant equity in a home or other property and want to keep it.
  • You have regular income and can pay your living expenses, but you can’t keep up thr scheduled payments on you debt.

Advantages of Chapter 13:

  • You keep most of your property while spreading out to pay past due accounts.
  • You’ll have 3-5 years to catch up delinquent accounts according to a scheldule that you and the bankruptcy trustee have agreed on.
  • 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.
  • Co-signors may be protected

Who Can File Under Chapter 13?

  • Any individual debtor who unsecured debts are below $350,475 and whose secured debts are less than $1,081,400. (Verify – Subject to Change)

The above list is just a quick overview of some of the most common reasons for choosing which Chapter to file. 

THIS IS NOT LEGAL ADVICE. IF SUCH IS DESIRES CONTACT A COMPETENT ATTORNEY FOR SUCH.