When you’ve finally run out of options, there always seems to be one option left for you — bankruptcy. It’s a topic that few people actually want to talk about, and the reality of the matter is that straight conversation is necessary in order to move forward. If you’ve decided to make the hard decision and pursue bankruptcy, there are a few questions that you’ll have right off the bat. One of the most frequently asked questions out there is what type of bankruptcy should you actually file.
There are a few different types of bankruptcy in the United States, and the right one for you will depend on what your financial goals are, as well as how much money you have to spare.
You see, the primary types of bankruptcy in the United States are a Chapter 7 and a Chapter 13 bankruptcy. When you cannot pay back your debts or you do not have enough income, you will want to look into a Chapter 7 more than a Chapter 13. A Chapter 7 makes it so that you will be able to pick up the pieces of your life and move on, while having your debts discharged. When most people talk about filing bankruptcy, they are definitely talking about that type of bankruptcy filing. You can have a lawyer process this type of bankruptcy, or you can actually file it yourself — all it really takes is a few simple forms and paying the filing fee. If you really don’t have enough money for a lawyer, you may try to take this route.
Of course, there is Chapter 13 bankruptcy, which essentially takes all of your debts and restructures them so that you aren’t going to have to deal with a huge monthly payment. Chapter 13 bankruptcy is a better option for people that have a monthly income still coming in that is high enough to the point where they would not qualify for a standard Chapter 7 bankruptcy.
Which one is right for you? Well, it just depends on your financial situation and the debts that you have. If you have a steady income and you know that you will want to reorganize your debts to make them easier to afford, a Chapter 13 bankruptcy is definitely a good idea.
Overall, now that you have a little more information about the bankruptcy types, it’s time to make a decision — what will you choose?