To file for bankruptcy or not to file for bankruptcy. That may be the question you find yourself asking if you are staring down a case of insurmountable financial problems, but one that is ultimately hard to answer. In some cases, chapter 7 bankruptcy is a better fit than chapter 13 bankruptcy. How do you know which is right for you? For starters, chapter 7 bankruptcy is often quicker, filers can keep all or most of their property, and filers do not pay through a three-to-five-year repayment plan. Not everyone may qualify for a chapter 7 and in some cases, it does not provide the help the filer needs.
One good question to ask yourself if you are considering chapter 7 bankruptcy: do I have more debt than I’ll ever be able to pay back, given my current income and property? If the answer is yes, then chapter 7 bankruptcy may be the right option. Below are some advantages to filing chapter 7 bankruptcy:
- It is relatively quick – A typical chapter 7 bankruptcy case takes three to six months to complete.
- No payment plan – Unlike chapter 13 bankruptcy, a filer doesn’t pay into a three- to five-year repayment plan.
- Many, but not all debts are discharged. The person filing emerges debt-free except for particular types of debts, such as student loans, recent taxes, and unpaid child support.
To know if you qualify, you take the means test to see if your income qualifies. If your income is below the average income for a family of the size in your state, you automatically qualify. If your income is higher than average, you have another opportunity to pass. Considering expenses include child support, tax debt, secured debt, such as a mortgage or car loan.
Whether you should file for chapter 7 bankruptcy depends on your financial situation and what other debt relief options are available to you. If you need any assistance with filing for bankruptcy, or if you need help in evaluating if bankruptcy is the right option for you, please contact us at (206) 408-8158, or by email at: [email protected]