Bankruptcy Chapter 7 or 13 - Which is right for you?

Aug. 15, 2010 - PRLog -- There are several different chapters under federal law in which to file bankruptcy. Chapter 7 and chapter 13 are the most common filings for an individual debtor. Chapter 11 primarily involves business bankruptcy. A consumer may file under chapter 11 but individuals tend not to file under this chapter because it is much more complex and more expensive. Chapter 12 bankruptcy is generally reserved for the family farmer. So generally when an individual files for bankruptcy they generally do so under chapter 7 or 13.

Chapter 7 bankruptcy is generally referred to as a straight bankruptcy. This is a complete liquidation of an individual’s non-exempt assets. The trustee receives the property from the debtor and then converts the property to cash and distributes the proceeds to the creditors. After the trustee distributes the proceeds the debtor generally receives a discharge shortly after, roughly 3-5 months. This is the “fresh start” associated with a chapter 7 bankruptcy. While this process sounds simple, it can be difficult to meet all the filing requirements and rules of the court. Having an experienced bankruptcy attorney on your side reduces the amount time and energy spent by an individual debtor. A bankruptcy attorney will do the leg work for your case.

Chapter 13 bankruptcy is a reorganization of the debtor’s income and expenses. Chapter 13 is reserved for those debtors who wish to pay off their debts. The typical chapter 13 bankruptcy plan lasts for 3-5 years. During this time, the debtor will pay off his debts according to the approved plan. Unlike a chapter 7 bankruptcy, in a chapter 13 the debtor keeps the majority of the property they own. A chapter 13 debtor must make enough money to pay reasonable expenses and a portion of their pre-existing debts.

Depending on your financial situation, the amount of income you have, and the amount and types of assets and debts you have will determine the right type of bankruptcy for you. Speaking with a bankruptcy attorney early before filing will provide insight into the bankruptcy that is best suited for your situation. While it is possible for an individual to file for bankruptcy on their own, there are many pitfalls riddled throughout the bankruptcy process. Having a qualified bankruptcy attorney on your side takes the guesswork out of the bankruptcy process.

For more information visit http://www.bankrupcyrelief.net or call us directly. Here is another bankruptcy article http://www.prlog.org/10861136-bankruptcy-and-student-loan... and here is another http://www.prlog.org/10861133-in-bankruptcy-whats-the-dif... for your reading enjoyment.

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