What Type of Bankruptcy Should You File?
When you decide to file bankruptcy, you have options. A bankruptcy attorney can evaluate your specific situation and help you decide which type of bankruptcy is right for you.
- Chapter 7 Bankruptcy – Often called “liquidation bankruptcy,” Chapter 7 is often used to completely eliminate debt quickly. It can take between four and six months to complete a Chapter 7 bankruptcy, and at the end, most, if not all, of your debt will be discharged.
- Chapter 13 Bankruptcy – Often called “reorganization bankruptcy,” Chapter 13 allows you to structure your debt into a manageable payment plan that can take three to five years to complete. At the end of your payment plan, some of your debt may be discharged.
There are other types of bankruptcy that may benefit you if neither Chapter 7 nor Chapter 13 is right for you. You should speak with a bankruptcy attorney before making any decisions about your financial future in Plano.
Why It’s a Good Idea to Work with a Lawyer When Filing Chapter 7 Bankruptcy
The Chapter 7 bankruptcy process features many “moving parts.” To begin with, filers are required to attend a pre-filing credit counseling course. This seems like a straightforward direction, but it can be tricky to track down course providers that are approved by the Justice Department. Our Plano attorney can help you get into an approved course that works for you, as non-approved courses won’t count towards your bankruptcy requirements.
Bankruptcy paperwork is notoriously detailed and tedious to compile. While we’ll need you to provide us with information about your income, debts, creditors, expenses, and property, we’ll do the “heavy lifting” of preparing your paperwork properly so you don’t have to.
Additionally, filers are required to attend a meeting of creditors, to send additional paperwork to the trustee assigned to their cases, and to attend a second educational course. We’ll make sure you’re prepared for all of these mandates.
Finally, our firm can help you to report any debt collector harassment or violations of the automatic stay that kicks in when your case is filed. Creditors can’t “come after you” while the automatic stay is in place. If any creditors violate the automatic stay, we’ll handle it.
How to Qualify for Bankruptcy
Both Chapter 7 and Chapter 13 require filers to qualify, but in different ways. For Chapter 7, you will take a means test that will determine if your income is low enough to be eligible. Your assets must also be under a certain limit. For Chapter 13, you must have enough disposable income to repay your debts. There are also limits on the various types of debt for Chapter 13.
A bankruptcy attorney can help you with the Chapter 7 means test to determine if you qualify for Chapter 7 in Plano. You may be able to skip the means test and automatically qualify. If you don’t, then you may be able to opt for Chapter 13, which can still help you wipe your financial slate clean.