Which Bankruptcy Chapter Should I Choose?

Knowing what chapter of bankruptcy you should file is a very important decision you have to make

. If you choose the wrong chapter, you could lose assets that were valuable and important to you and you may have a payment plan that is much longer than you desired.

The two chapters of bankruptcy that are used the most are Chapter 7 and Chapter 13. Both are different in many ways and the choice will usually depend on what your situation is financially. You should always consult a San Diego Bankruptcy Lawyer before any decision is reached.

Chapter 7 is the most common bankruptcy filed and is also called straight bankruptcy. With Chapter 7, the court can take your assets and the ones they feel are non-exempt, they divide them equally between your creditors. When your property has been liquidated, you are no longer responsible from paying any more debts. With Chapter 13 bankruptcy, a percentage of your debt must be repaid to the creditors but will be spread out over a time period which can go up to five years. With Chapter 13, you are allowed to keep your property.

In most cases, your income is the deciding factor in which chapter you file. With a high income, you may have to opt for Chapter 13 even if you wanted to file the Chapter 7. The court is the one that decides through a means test which asks a number of questions about income and disposable income. If your income, compared to others in your state, is high, the court will require you to file a Chapter 13. All property is considered non-exempt with a Chapter 13. If you can make payments and want to keep your property, Chapter 13 is the way to go.

Remember that the court can decide if you file a Chapter 7 or Chapter 13 when you file for a bankruptcy. With an income that is too high, you may have no options but Chapter 13. If you have a home to protect, you would want to go with the Chapter 13 knowing you will be making some type of payment. If you dont have much that needs to be saved and a low or no income, you will probably want to go with a Chapter 7.

Do some research before you make the decision about filing bankruptcy and review all your options. A professional San Diego bankruptcy Attorney can help to advise you if you are unsure which chapter of bankruptcy to file.

by: Johnny Lowery

POST COMMENT

Every Bankruptcy Lawyer Is Not A Crook Bankruptcy Exemptions In Canada The Information Your Bankruptcy Attorney Should Give You When Willie Nelson Needed A Bankruptcy Lawyer Find Out What Bankruptcy Help San Mateo Can Offer Finding The Best Bankruptcy Attorneys Finding The Top Bankruptcy Attorneys Chapter 7 Bankruptcy - Rebuilding Your Credit General Information On Bankruptcy Lawyer Bankruptcy As A Solution For Many Debt Problems Talking Money With A Bankruptcy Attorney West & Hurley: Dayton Chapter 7 Bankruptcy Specialists For All Of Your Credit Card Debt Relief Needs How To Pick The Best Bankruptcy Lawyer Aurora Can Provide