Bankruptcy Help: Which Kind to File?


Are you considering filing for bankruptcy but don’t know where to start? Lawyers and attorneys can provide bankruptcy help, but first, take a look at your current situation and think about what you need.

There are some common scenarios that happen time and again that require people in difficult debt situations to seek out bankruptcy help. If any of these situations sound familiar, see our answers to determine which of the different types of bankruptcy filings is right for you.

    • Situation: I Need to Wipe Out My Debt.Answer: Chapter 7 bankruptcy. This is what’s known as “liquidation.” The court will work to eradicate any unsecured debts — meaning your credit card, personal loans, and medical bills.


    • Situation: I Need to Find a Different Way to Repay My Debt.Answer: Chapter 13 bankruptcy. This method is about “reorganization,” and while some debt may be eliminated or reduced, others will still need to be repaid in time.


    • Situation: I Have a Low Income or Little Disposable Income.Answer: Chapter 7. This only works for people who have little to no extra income after paying their monthly living expenses and have no assets to sell for debt repayment. While the fee for filing for bankruptcy under Chapter 7 is only $306, bear in mind that it will stay on your credit report for 10 years afterwards and takes around six months to complete.


    • Situation: I Own Property or Have a Disposable Income.Answer: Chapter 13. Many people with financial assets cannot file for Chapter 7. You can only exempt a certain amount of property when you file for bankruptcy; the more nonexempt property you own, the higher your payments will be.


    • Situation: I Have Nondischargeable Debt.Answer: Chapter 13. If you owe money in taxes, student loans, or child and spousal support, they will not be wiped out by a Chapter 7 filing.


  • Situation: I Need to Stop a Mortgage Foreclosure.Answer: Chapter 13. This is another difference between Chapter 7 and 13. A mortgage lender will be forced to accept your new payment plan, provided you can demonstrate adequate future income.

When you need bankruptcy help, take a moment to assess your own conditions, needs, and assets before you schedule a meeting with a bankruptcy attorney. That way, you can ensure the process not only runs smoothly, but gets the results you need to move forward with your life.