subject: Types Of Bankruptcy - Provo Utah Bankruptcy Lawyer [print this page] If you are considering filing for bankruptcy, it is always a good idea to talk to a Provo Utah bankruptcy attorney. Your attorney will help you to not only decide whether or not filing bankruptcy is the best option for you, but if bankruptcy is what your attorney recommends, they will help you to determine which type of bankruptcy is best for you, or which type you qualify for. It is important for you to understand what each type of bankruptcy entails so that you know ahead of time what you are getting yourself into.
The two types of bankruptcy, chapter 7 and chapter 13 bankruptcy, are similar in some ways and very different in others. One way in which they differ greatly is the qualifications you must meet in order to be eligible for each type. Chapter 7 bankruptcy is the most common type, with well over half of people filing for chapter 7 type. Your Provo Utah bankruptcy attorney will help you to determine whether or not you are eligible though, because not everyone is. You must have a low income, little valuable property, and a large amount of debt. The exact amounts vary, and must be analyzed, so your Provo Utah bankruptcy attorney will need to help you to determine your eligibility.
Chapter 13 qualifications are a bit different, and though there are advantages to getting chapter 13 bankruptcy versus chapter 7, it is not for everyone. In order to qualify, your debt must be beneath a certain amount, or you must have already filed for chapter 7 bankruptcy within the last seven years, making you ineligible for chapter 7.
If you qualify for both types of bankruptcy, however, what is the best way to decide which type of bankruptcy will be best for you? Your Provo Utah bankruptcy attorney will help you to determine this, but here are some things to be aware of. Chapter 7 bankruptcy is essentially an agreement between you and the court, saying that the court will discharge some of your debt on the understanding that your property can be liquidated and the money given to your creditors. There are some types of property that are exempt from this (usually homes and cars, but this varies by state), but aside from these exemptions, anything you own can be seized and sold.
Chapter 13 bankruptcy allows you to protect more of the things that you would like to keep. There are rules, however, that your Provo Utah bankruptcy attorney can explain which must be followed. You must be able to pay your debt off over a space of five years, but you will have much better conditions to pay them off, in which your creditors are not allowed to pursue legal action or force payments. You will be able to pay off your debts at your own pace as long as they are all paid off at the end of the five years without any additional legal consequences. This is difficult to impossible for some people, however, because you must be able to pay your living expenses and pay off your debts without taking out any additional loans or going further into debt.
