Choosing between Chapter 7 and Chapter 13

Determining the Right Bankruptcy Filing

Choosing between Chapter 7 and Chapter 13If you experiencie financial challenges and conclude that your best strategy for moving forward is through bankruptcy, there are two paths you can potentially take—Chapter 7 or Chapter 13. You may not know if or how you qualify for one filing or the other. Here’s an overview.

Chapter 7 Bankruptcy Petitions

In a Chapter 7 proceeding, also known as liquidation, you have the opportunity to permanently discharge certain debts in exchange for transferring property to the bankruptcy trustee (to be sold to satisfy your creditors). Some debts, such as child support, student loans, and certain tax obligations, may not be discharged. Additionally, you can claim some of your property as exempt from transfer, including some value in your home, a motor vehicle, and some personal property

Under the current bankruptcy law, however, you must qualify to file under Chapter 7. You must submit to a “means test,” whereby you demonstrate to the court that you lack the “means” to repay your creditors in full over a three-to-five-year period. If you fail the means test, your only option in personal bankruptcy is under Chapter 13.

Chapter 13 Bankruptcy Filings

With a Chapter 13 filing, also known as a debtor reorganization, you must work with your creditors to create a plan to repay them over a three-to-five-year period. During that time, your creditors may not call, write, or otherwise attempt to collect the debt, other than through the bankruptcy court.

When you file for protection under Chapter 13, you get to keep all your property. Accordingly, if you are considering bankruptcy, but want to keep your assets, you may choose to pursue a Chapter 13 filing, even if you qualify for Chapter 7.

Contact an Experienced Rockwall, Texas, Bankruptcy Attorney

At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. I am currently communicating with clients by phone, text message, and videoconference. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Rockwall County, Collin County, Dallas County, Hunt County and the surrounding counties.

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Call Rockwall bankruptcy lawyer Carrie Weir at 972-772-3083 or fill out the contact from below for a free, confidential consultation to discuss your options.

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