Bankruptcy: The Best Choice?

If you are wondering if bankruptcy is the right choice for you, remember that there are many factors that determine how you should handle your debt.  While bankruptcy is not the right choice for some people, it can help many people who are struggling with trying to pay their bills.

You May Be A Candidate for Chapter 7 If . . .

Chapter 7, or “liquidation” bankruptcy, is the most common and discharges almost all debts relatively quickly.  If the following conditions apply to you, it is possible that Chapter 7 bankruptcy is the right course.

• You have mostly unsecured debt, such as credit cards, rather than secured debt such as a mortgage or car loan
• You owe more on your home or car than it is worth
• You want a “fresh start” financially and do not mind starting over
• You are unemployed or do not have a steady income

Chapter 7 provides the quickest way to get a discharge in most cases but usually requires you to turn over any secured collateral to the creditor.  However, in some cases you may be able to keep certain items, so it is important to discuss both your assets and your debts with your attorney.

You May Be A Candidate for Chapter 13 If . . .

Chapter 13 is also called a “wage-earner plan” or a “reorganization” because the debtor makes regular payments to the Court that are applied to secured debt.  This is usually the right choice for someone who has a home, a car or other secured collateral that he or she wishes to keep.  It may also be the right choice for someone who is simply overwhelmed with debt and needs help discharging some of the unsecured portion of the debt while paying for the secured amount.  If the following is true for you, it is possible that Chapter 13 is the way to go:

• You have a job or steady income
• You have debt collateral that you want to keep such as a car or home
• You have equity in your home or vehicle
• You want to pay off your creditors through a payment plan

Chapter 13 takes longer than Chapter 7 to receive a discharge in some cases, and you are required to make regular payments to the Trustee.  If you fail to do so, you may not receive your discharge and the judge can lift your bankruptcy stay. Contact Oswalt Law Group for more information about how to protect yourself and your assets through bankruptcy.