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What bankruptcy can I file for?

| Mar 31, 2020 | Firm News |

Making the decision to file for bankruptcy can be extremely stressful. However, the good news is that financial relief is close at hand. 
 
As an individual, you are potentially able to file for Chapter 7, Chapter 11, or Chapter 13. According to Credit.com, which one is best for you depends upon your particular financial situation and the nature of your debt. 
 
How do these bankruptcies work? 
 
Chapter 7 is by far the most common variety of bankruptcy that individuals file. With Chapter 7, which is often called a “liquidation” bankruptcy, your debt will go away very quickly since you liquidate your assets to pay it off. This means that you are likely to lose your house, car, or other property with a Chapter 7. 
 
On the other hand, a Chapter 13 bankruptcy is also known as a “reorganization” bankruptcy. Usually individuals who have a high enough income to pay off their debts file Chapter 13. The good news about a Chapter 13 is that you will usually get to keep your assets. The negatives to a Chapter 13 is that they normally take longer to get through. 
 
A Chapter 11 bankruptcy is somewhat similar to a Chapter 13 bankruptcy. Chapter 11 is most often filed by small businesses. However, in the event that you do not qualify for a regular Chapter 13, you may look into filing a Chapter 11 as an individual. 
 
How can I decide? 
 

Generally, whether you file a Chapter 7 or a Chapter 13 is dependent upon your income level. Persons with lower income levels typically file Chapter 7. The difference between Chapter 13 and Chapter 11 is often very specialized. We recommend you talk with a professional to make this decision.