How to Decide Between Chapter 7 and Chapter 13 Bankruptcy
When you are considering personal bankruptcy, you are likely looking at the possibility of either Chapter 7 bankruptcy or Chapter 13 bankruptcy. While individuals do occasionally file for Chapter 11 bankruptcy, this only happens when they are ineligible for Chapter 13 bankruptcy as a result of having too much debt, and it is a relatively uncommon situation. As you are looking into the possibilities for Chapter 7 or Chapter 13 bankruptcy, you may be asking yourself: How am I supposed to decide between Chapter 7 and Chapter 13 bankruptcy?
Ultimately, it is unlikely that you will be eligible for both Chapter 7 and Chapter 13 bankruptcy at the same time since they have quite different eligibility requirements. Instead, you should be looking at the process for each type of bankruptcy and asking yourself the question: am I most likely to be eligible for Chapter 7 bankruptcy or Chapter 13 bankruptcy? And if you are seeking the particular benefits of one of these types of bankruptcy, you should be discussing eligibility requirements with an Oak Park bankruptcy lawyer as soon as you can. In the meantime, consider the following information.
Rather Than Choosing Between Types of Bankruptcy, You Should Think About Eligibility Requirements
Under the Bankruptcy Code, most consumers who are planning to file for bankruptcy will not be equally eligible for Chapter 7 and Chapter 13 bankruptcy based on their individual financial circumstances. Rather, their financial circumstances will likely qualify them much more obviously for one type of bankruptcy over the other. Thus, rather than thinking about choosing between existing types of bankruptcy, you should be thinking about eligibility requirements for different types of consumer bankruptcy and how you can meet them.
In order to qualify for Chapter 7 bankruptcy, which is a type of liquidation bankruptcy, you will need to show that your income and assets are sufficiently low that it would not be an abuse of the bankruptcy system for you to go through a liquidation bankruptcy and receive a discharge. To prove this, you will typically need to pass the “means test.”
For Chapter 13 bankruptcy, you will need evidence that you are a wage earner who can keep up with the monthly payment schedule associated with a reorganization bankruptcy.
Benefits of Chapter 7 and Chapter 13 Bankruptcy
Are there reasons you might want to try to qualify for one type of bankruptcy over another?
The primary benefit of Chapter 7 bankruptcy is that it allows for the discharge of eligible debts within a short number of months after filing for bankruptcy, giving the debtor a fresh start. There are a few key benefits of Chapter 13 bankruptcy, including that it offers consumers a way to reorganize and get caught up on debts, and, especially, to stop a foreclosure and remain in their homes.
Contact a Bankruptcy Attorney in Oak Park
If you have questions about your eligibility for any type of consumer bankruptcy, or if you are trying to determine how to become eligible for a specific type of bankruptcy given its particular benefits, you should get in touch with one of our experienced Oak Park bankruptcy attorneys as soon as possible. Do not hesitate to reach out to our firm to learn more about the services we provide to consumers in the Chicago area. Contact the Emerson Law Firm today for more information.
See Related Blog Posts:
Assets Commonly Exempt in Liquidation Bankruptcies
Who Should Be Thinking About Bankruptcy?
Ultimately, it is unlikely that you will be eligible for both Chapter 7 and Chapter 13 bankruptcy at the same time since they have quite different eligibility requirements. Instead, you should be looking at the process for each type of bankruptcy and asking yourself the question: am I most likely to be eligible for Chapter 7 bankruptcy or Chapter 13 bankruptcy? And if you are seeking the particular benefits of one of these types of bankruptcy, you should be discussing eligibility requirements with an Oak Park bankruptcy lawyer as soon as you can. In the meantime, consider the following information.
Rather Than Choosing Between Types of Bankruptcy, You Should Think About Eligibility Requirements
Under the Bankruptcy Code, most consumers who are planning to file for bankruptcy will not be equally eligible for Chapter 7 and Chapter 13 bankruptcy based on their individual financial circumstances. Rather, their financial circumstances will likely qualify them much more obviously for one type of bankruptcy over the other. Thus, rather than thinking about choosing between existing types of bankruptcy, you should be thinking about eligibility requirements for different types of consumer bankruptcy and how you can meet them.
In order to qualify for Chapter 7 bankruptcy, which is a type of liquidation bankruptcy, you will need to show that your income and assets are sufficiently low that it would not be an abuse of the bankruptcy system for you to go through a liquidation bankruptcy and receive a discharge. To prove this, you will typically need to pass the “means test.”
For Chapter 13 bankruptcy, you will need evidence that you are a wage earner who can keep up with the monthly payment schedule associated with a reorganization bankruptcy.
Benefits of Chapter 7 and Chapter 13 Bankruptcy
Are there reasons you might want to try to qualify for one type of bankruptcy over another?
The primary benefit of Chapter 7 bankruptcy is that it allows for the discharge of eligible debts within a short number of months after filing for bankruptcy, giving the debtor a fresh start. There are a few key benefits of Chapter 13 bankruptcy, including that it offers consumers a way to reorganize and get caught up on debts, and, especially, to stop a foreclosure and remain in their homes.
Contact a Bankruptcy Attorney in Oak Park
If you have questions about your eligibility for any type of consumer bankruptcy, or if you are trying to determine how to become eligible for a specific type of bankruptcy given its particular benefits, you should get in touch with one of our experienced Oak Park bankruptcy attorneys as soon as possible. Do not hesitate to reach out to our firm to learn more about the services we provide to consumers in the Chicago area. Contact the Emerson Law Firm today for more information.
See Related Blog Posts:
Assets Commonly Exempt in Liquidation Bankruptcies
Who Should Be Thinking About Bankruptcy?
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