Should I File for Chapter 7 or Chapter 13 Bankruptcy?

Written By: Brandy Miller | December 15, 2017 | No Comments

Basic Difference Between Chapter 7 and Chapter 13 Bankruptcies

In general, Chapter 13 bankruptcy allows you to renegotiate and restructure your debts, while Chapter 7 discharges some of your debts. Both Chapter 7 and Chapter 13 Bankruptcies allow you to enjoy a fresh financial start. Choosing the right type of bankruptcy is important. The right option will ensure you have the best chance of rebuilding your financial life. Find out more about the differences between Chapter 7 and Chapter 13 Bankruptcies.

A Means Test Determines Your Bankruptcy Options

In Pennsylvania, the 2005 Bankruptcy Act mandated that a means test be applied to your case. The court analyzes your expenses and income to determine whether you qualify for Chapter 7 bankruptcy.

• If your income for the six months before you filed was below the median income for the state, you may have the option of choosing between Chapter 7 and Chapter 13.
• If your income is higher than this amount, you may need to file for Chapter 13.

Basic Questions to Determine if a Chapter 7 or Chapter 13 Bankruptcy is Best

If your Means Test allows you a choice between Chapter 13 and Chapter 7, ask yourself a few questions.

• How much property do I have and what kind of property is it?
  • Chapter 7 will protect certain types of property but ask you to surrender or liquidate some assets. If there is nonexempt property you wish to keep, Chapter 13 may make more sense for you.
  • If you don’t have many assets and the items you do have are protected, Chapter 7 will be the better choice.
• Do I want to repay my debts rather than eliminate them?
  • If your best option is to eliminate some of your debts, Chapter 7 is your only option.
  • However, if you do want to make your payments current, Chapter 13 is the better choice.
• What kind of debts do I have?
  • If you have mostly credit card debt and unsecured debt, Chapter 7 allows you to eliminate some of it, making it easier to pay down.
  • However, if the majority of your debt relates to student loans, child support, tax debts and other forms of nonexempt debt, filing Chapter 7 will not substantially reduce your debt load. In these cases, Chapter 13 may make more sense.

Consult With Our Expert Bankruptcy Attorneys to Help You Decide Between Chapter 7 and Chapter 13 Bankruptcy

Filing for Bankruptcy is a big step. The financial and other costs of Bankruptcy can be substantial. Talk to our Bankruptcy Attorneys.

• We’ll gain a detailed understanding of your unique situation;
• determine if Bankruptcy is your best alternative for solving your financial problems.; and
• if Bankruptcy is the right approach, help you decide which type of Bankruptcy is best for you.

You Won’t Find Better Bankruptcy Lawyers in Reading, PA, Berks County and Pennsylvania

We’re proven, experienced and expert Bankruptcy Lawyers. We have

• • 40 years’ of experience helping Bankruptcy clients in Berks County around Reading, PA.
  • a full range of expertise in other legal areas impacted by Bankruptcies including
    • Business
      • Contracts;
      • Contract Disputes; and
      • Dissolution;
    • Estate Planning;
    • Divorce;
    • Spousal Support and Alimony; and
    • Child Support
• have a reputation for giving clients genuine emotional support and respect;
• explain legal matters in plain English, so you don’t have to be a Bankruptcy Lawyer versed in legalese to have a conversation with us; and
• make sure you walk away knowing where you’re at, what will happen next, when it happens and that things will get better and you’ll be alright.

The Bankruptcy Lawyers you’re looking for are right here waiting for you. Contact Us Online or Call Us at 610-670-9000 today. We’ll start helping you get your finances, and your life, back on track.

Miller Law Group’s Berks County Law Offices are in West Lawn near Reading, PA.