What Are the Different Bankruptcy Chapters?

It can be a hard decision to file for bankruptcy, but you may not have much of a choice. Luckily, you have different options depending on your situation. From Chapter 13 to Chapter 11, through Chapter 7, your consumer bankruptcy lawyer may be able to help you with the best option. Here are the different bankruptcy chapters you should know about.

Chapter 13

Do you have a regular income? If so, according to the U.S. Courts, you may be able to work out a plan to pay off your debt by way of installments over three to five years while keeping your property. Once your consumer bankruptcy lawyer helps you get approved for this option, your creditors can no longer make collection efforts. If anybody was a cosigner on your consumer debt, they’re protected from collection pursuits as well.

Chapter 11

If you're a business with debt but want to continue to operate, filing for Chapter 11 can allow you to re-organize. As a result, you'll be able to pay off your creditors over time while still operating a functional company. You may be able to borrow new money to operate your business as long as you get approval from the courts first.

Chapter 7

Chapter 7 is a more expansive option as it can pertain to individuals, corporations, and partnerships in debt. If you file Chapter 7, you can protect your assets as long as you are current on the payments for the collateral you would like to keep, like your house and car. In order to be eligible, you have to meet certain income requirements. In the six months leading up to filing, your income must be lower than the median income for a household of your size within your state. The courts also look at the amount of disposable income you have. Hire an experienced bankruptcy attorney to help you access your options.

If a bankruptcy filing is your best option, you have access to legal professionals who can guide you through the process. Contact a professional who can review these options to see which is best for your situation. By hiring a consumer bankruptcy lawyer, you will have a professional file the paperwork and represent you through the court system. If you're ready to take this step, set up a consultation with Wiley & Jowers law office today!