Although not a topic most people like to think about, bankruptcy often does become the only option for some people to deal with a debt problem. Bankruptcy is a fast and effective way to eliminate debt and start over fresh. According to the American Bankruptcy Institute, since 2022 bankruptcy filings have increased by 17%, so if you are considering bankruptcy remember that you are not alone. To make the best choice during this time, though, you need to know the difference between the different types of bankruptcy that are available.
The Different Types of Bankruptcy
There are different types because people need different solutions to different types of problems. There are currently two main types of bankruptcy available. The two types are Chapter 7 and Chapter 13 bankruptcy. Each type has different qualifications and guidelines and will help you accomplish different types of financial goals.
Chapter 7
Chapter 7 bankruptcy is for people who have never received a discharge in a Chapter 7 in the past 8 years or a Chapter 13 in the past six years. You will be put through an evaluation that looks at details such as your income, monthly expenses, and family size. This is the fastest route to eliminating debt and filing for this type will immediately halt collection efforts from harassing you. A consumer bankruptcy lawyer can help you better understand all of the details of this option.
Chapter 13
A Chapter 13 bankruptcy has more strict requirements and often takes longer. You cannot have an excess of $419,275 in unsecured debt. You must also have a regular income. To apply for this type of bankruptcy, you could not have received a discharge for Chapter 13 in the past two years or for Chapter 7 in the past four years. This type of bankruptcy often takes longer but gives you a better chance at retaining some of your assets or property.
A Consumer Bankruptcy Lawyer Can Help
To understand which type of bankruptcy option you should choose, you will need to sit down with a consumer bankruptcy lawyer. Our professional will be able to look at all of your financial details and advise you on which option is best for you. Choosing bankruptcy is a serious decision and you want to make sure that you make the right decision.
If you are considering bankruptcy, contact us today to learn more about your options.