Should I File for Chapter 7 or Chapter 13 Bankruptcy?
If you’re considering bankruptcy, you might be wondering whether it’s better to file under Chapter 7 or Chapter 13. Whether you choose Chapter 7 or Chapter 13 will likely depend on your income, debt, assets and financial goals. While both chapters can ultimately help individuals pay off debt, they feature significant differences.
This form of bankruptcy is designed to eliminate unsecured debt, such as that incurred from medical bills or credit card spending. To qualify for Chapter 7, you must have little or no disposable income.
After you file for Chapter 7, a trustee is appointed to your case to help you sell your nonexempt property. The proceeds are used to pay back your creditors. Chapter 7 is typically used for individuals with few assets and little income to eliminate unsecured debts.
This form of bankruptcy is for debtors who have a regular source of income and can pay back all or a portion of their debts using a repayment plan. As a Chapter 13 debtor, you can keep all your property, including nonexempt assets, as long as you make monthly payments. The total amount you are required to pay depends on your income, the type of debt and your expenses. Chapter 13 is commonly referred to as reorganization bankruptcy.
Filing for bankruptcy is a complicated process, but an experienced attorney can help. Contact an Indiana bankruptcy lawyer for the guidance you need.