How do you know what form of bankruptcy to choose?
Everything that matters in the life of U.S. residents typically requires making decisions. Even when you have chosen debt relief through bankruptcy, you must still make at least one more critical decision—what form of bankruptcy best meets your needs.
These decisions are not easy, but they are vital to your future financial wellbeing The two most common forms of consumer bankruptcy are Chapters 7 and 13. If you do not know which type is best for your situation, learning more can ensure you make the right decision.
Should you choose Chapter 7 bankruptcy?
As the most common form of bankruptcy, Chapter 7 offers many benefits. Most Huntsville, Alabama, residents choose a Chapter 7 bankruptcy when the circumstances below apply:
- You have no other way to clear your debts in the foreseeable future
- Most of your debt (medical bills, credit cards, etc.) is dischargeable under Chapter 7 rules
- You want relief from your debt as quickly as possible
If you meet the income requirements for Chapter 7 bankruptcy, it can address all the issues listed above.
Should you choose Chapter 13 bankruptcy?
If you earn too much to qualify for Chapter 7, the next logical option is Chapter 13. Below are several other reasons to file a Chapter 13 bankruptcy:
- You would like to repay at least some of your debt
- You want to stop the repossession of your vehicle
- You would like to stop the foreclosure of your home
A Chapter 13 bankruptcy also provides you with a better chance of keeping some of your personal possessions.
If you are still unsure how to proceed with bankruptcy, including what type to file, learning more about consumer bankruptcy can help you make these and other crucial financial decisions.