What Type of Bankruptcy is Right for Me?

If you are considering filing for bankruptcy you probably have a number of questions. Often times people turn to the internet or friends for advice, and may get confusing and inconsistent answers. The best course of action is to meet with an attorney. Many attorneys offer free, no obligation consultations. This is a great way to sit down with a qualified professional to discuss your particular case, ask questions, and get advice. While you should meet with an attorney, here there are some things you may want to consider and things you will want to be prepared to answer.

In meeting with an attorney, he or she will help you determine whether you should file a Chapter 7 or a Chapter 13 Bankruptcy. One of the first considerations is your income. Chapter 7 Bankruptcies are commonly known as “straight discharge” and the debtor(s) do not make any payments to creditors. A chapter 13 is known as a “reorganization” and the debtor(s) will enter into a three to five year repayment plan.

To file a Chapter 7 Bankruptcy you must be under the median income for your family size. This is calculated by looking at your income for the six months prior to the month of filing. If you are married and living with your spouse both of your income amounts will be included, regardless of whether you are filing a joint petition. If your income initially appears to be over median, you may still qualify for a Chapter 7, as your attorney can further evaluate your case to determine if your expenses pull you under the median income. If you are over the median income you will need to file a Chapter 13.

However, there are a number of reasons debtor(s) may desire to file a Chapter 13 instead of a Chapter 7, irrespective of qualification for a Chapter 7. If debtor(s) are behind on a secured debt, such as a house or a car, the arrears can be put into the bankruptcy plan. A Chapter 13 can save a house from foreclosure or repossession. There are a number of debts that cannot be discharged through a Chapter 7, but could be paid back through a Chapter 13 Bankruptcy. This approach may help the debtor(s) address all issues at once and get back on a track to financial stability.

Each case is different and the law can be quite complex and difficult to navigate. If you would like to set up a consultation, please contact a St. Louis Bankruptcy Attorney Today.