Who may qualify for filing chapter 7 or chapter 13 bankruptcy?

April 11, 2011 - PRLog -- Therefore, it is recommended to take help of legitimate bankruptcy attorney to decide upon correct type of bankruptcy according to your financial situation. Here are few guidelines which will help you to decide upon filing bankruptcy.

It is very tough to decide upon filing chapter 7 bankruptcy or chapter 13 without having complete knowledge of particular type of bankruptcy. Therefore it is very essential to know which bankruptcy will give the best outcome in accordance with your financial situation. let’s review the basic characteristic of both the bankruptcy and for whom is the filing recommended according to their current financial status.

Principal characteristics of chapter 7

This type of bankruptcy accounts for almost 65% of all consumer banking filing, making chapter 7 most common type of bankruptcy. The reasons for chapter 7 being the most common is its liquidation of all assets or straight bankruptcy, which declares you debt free in few month of filing. Once you file for chapter 7 than your creditors have no right to contact you or take any legal action against you for the collection of their pending payments. You can know chapter 7 bankruptcy rules in detail from any reliable experience bankruptcy advocate.

Chapter 7 is favorable for following individuals:

•   Those who owes lot on medical or credit card debts
•   Have very few asset
•   Have low or no income
•   Have rent their homes

Principal characteristics of chapter 13

This type of bankruptcy is for individuals who have fixed monthly income and can afford to repay the debts according to the decided repayment plan in bankruptcy court between debtor and his creditors. Repayment period is for maximum 5 years; all the debts have to be repaid during this time.

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Chapter 13 is favorable for following individuals:

•   For all those who owes unsecured debts under the line of $300,000 and for the one whose secured debts are bit more than $1,000,000

•   Those who have lot many assets

•   Debts accumulated because of illness, job loss, injury or temporary financial hardships

•   Individuals with fixed monthly income

It is very difficult to file bankruptcy individually. Hence it is recommended to hire a legitimate bankruptcy lawyer who can guide you in selecting the type of bankruptcy which can give you the best outcome according to your financial situation. He will represent himself on your behalf in bankruptcy court and will negotiate with your creditor. You can search for reliable experienced lenders online. Look for lawyers who have license to work in your state.

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