How To Determine Which Bankruptcy Option is Right for You

Which Should You File: Chapter 7 or Chapter 13 Bankruptcy

There are many different types of bankruptcy and debt relief options available for people who are struggling with debt. Determining which choice is the right one depends on your personal situation, the amount of debt you owe, the type of assets you have and how much income you receive. That is why it is always best to review your financial situation and consider all your available options with an expert adviser and attorney before moving forward with bankruptcy.

But once you have decided that bankruptcy is the right solution, you will then need to decide which type of bankruptcy is best for your financial situation. While there are several types of bankruptcy options available, the most common ones filed are Chapter 7 and Chapter 13. Here is how you can determine which bankruptcy option is right for you:

Chapter 7 Bankruptcy

Type: This type of bankruptcy involves liquidation. A Chapter 7 bankruptcy will discharge most types of unsecured debt. The appointed trustee will sell any nonexempt property to repay your creditors.

Eligibility: Both individuals and business entities can file for Chapter 7. To be eligible, you must either pass the means test or have an income that is less than the median of your state.

Income: A Chapter 7 bankruptcy requires your disposable income to be low enough to pass the means test.

Property: This type of bankruptcy can require significant equity or assets not exempt by law to be sold to satisfy some debts.

Time Frame: A typical Chapter 7 bankruptcy can take 3-4 months to complete.

Advantages: This option allows you to quickly discharge your debt in order to get a fresh start.

Disadvantages: Besides the risk of having your nonexempt property sold by your trustee, Chapter 7 bankruptcy does not provide a way to catch up on missed payments to avoid foreclosure or repossession.

Chapter 13 Bankruptcy

Type: This type of bankruptcy involves reorganization. A Chapter 13 bankruptcy requires you to repay some creditors in full and some creditors in part through a repayment plan.

Eligibility: Only individuals and sole proprietors can file for Chapter 13. To be eligible, you must have unsecured debt below $383,185 and secured debt below $1,149,525.

Income: A Chapter 13 requires you to have a regular income for the monthly payment.

Property: This type of bankruptcy requires no property to be liquidated.

Time Frame: A typical Chapter 13 bankruptcy can last 3-5 years, depending on your income and repayment plan.

Advantages: This option allows you to keep your property, catch up on missed payments like your mortgage and car.

Disadvantages: Besides having to pay back a portion of your unsecured debts, Chapter 13 bankruptcy can require monthly payments that last for years.

At The Metka Law Firm, our goal is to make it easier for you to pay off your debt and limit the damage done to your credit score during the process. Our attorneys will provide you the guidance and support you need as you get your financial life back on track. To learn how we can help you lessen and even eliminate your debt, call us or schedule your free initial consultation today.

When You Should File For Bankruptcy

How to Know If You Qualify For Bankruptcy

Determining when and if you should file for bankruptcy is often a difficult and tricky question to answer. Whether bankruptcy is the right solution to your financial problems depends on the type of debts you have, how much property you need to protect, and your personal situation. While it is best to consult a professional before making any significant decisions about your debt, here are 3 ways to determine when to file and if you qualify for bankruptcy:

Alternatives. Because declaring for bankruptcy has long-term effects on your finances for many years, it is important that you carefully weigh all of your options before filing. Your bankruptcy attorney can help determine if there are alternatives you can explore. This can include negotiating with your creditors and exploring federal and state debt collection laws to stop creditors from harassing you.

Eligibility. In order to file for bankruptcy, there are certain requirements that you must meet. For example, Chapter 7 bankruptcy is only available to those whose income is less than the median of their state, or those who can pass the means test. The bankruptcy means test can determine if you should discharge your debt completely through Chapter 7 or be required to pay part of your debt through Chapter 13.

Types of Debt. Filing for bankruptcy can help make debt more manageable and even help eliminate some of it. However, there are certain types of debts that will remain, regardless of whether you intend on filing for Chapter 7 or Chapter 13 bankruptcy. This includes tax debts, child support and alimony. When you should file for bankruptcy depends on whether you will benefit from it.

As experienced attorneys, we do more than simply help you determine whether or not you should file for bankruptcy – we make sure your property is protected, all of your dischargeable debts are discharged, and your creditors do not violate your rights. That’s because at The Metka Law Firm, our focus is to help you attain the financial freedom you deserve. Our attorneys will guide you through the complex and confusing process of declaring for bankruptcy in order to get your financial life back on track. To learn how we can help you lessen and even eliminate your debt, call us or schedule your free initial consultation today.