How We Can Help you

Bankruptcy Blog

Library

Is Chapter 7 Bankruptcy The Right Choice For Me?

After making the tough decision that declaring bankruptcy is the right option for you, you have one more difficult decision to make: should I file for Chapter 7 bankruptcy or Chapter 13 bankruptcy?

Chapter 7 bankruptcy is also known as liquidation bankruptcy. In the case of Chapter 7 bankruptcy, you do not simply reorganize your debt and come up with a payment plan - you sell off your valuable assets in order to pay some of your debts, and then the majority of your debts are completely forgiven. Many people chose Chapter 7 bankruptcy because it is faster, simpler, and does not involve ongoing payments. In addition, most debts are forgiven, with the usual exceptions of student loans, recent taxes, and back child support.

Unlike Chapter 13 bankruptcy, it is possible to lose your house when filing for Chapter 7 bankruptcy; however, many Chapter 7 filers are able to keep their primary property. To file for Chapter 7 bankruptcy, you must not have a regular, substantial paycheck that can be used toward your debt - most people who have jobs when they file for bankruptcy must opt for the Chapter 13 option.

In general, Chapter 7 bankruptcy is an optimal choice for those with little regular income, few large assets that they wish to keep, and more debt then they would be able to pay off in a five-year time frame. It is also the optimal choice for businesses who wish to shut their doors and sell their inventory in order to pay off debts. Chapter 7 bankruptcy is not optimal for those who have a relatively large paychek or for those who have significant property that they would like to protect during their bankruptcy.

Got A Question?

News

FAQs