If you are struggling to make credit card, mortgage or auto loan payments, it may be in your best interest to file for bankruptcy. Generally speaking, you will file for Chapter 7 or Chapter 13 protection. How do you know which one to choose from?
Knowing When to File for Chapter 7 Protection
To be eligible for a liquidation bankruptcy, you need to be able to pass a means test. Essentially, your income has to be less than the median figure in your state or county. Furthermore, if you have filed for Chapter 7 bankruptcy in the previous eight years, you will be forced to file for Chapter 13 protection instead. A Brooklyn Chapter 7 bankruptcy attorney may be able to help you learn more about whether this type of filing is right for you.
When Chapter 13 Bankruptcy Is the Better Alternative
Chapter 13 bankruptcy involves reorganizing your debts and repaying them in monthly installments over the course of three or five years. To be eligible for a reorganization bankruptcy, you have to create a payment plan approved by creditors and the court.
Your unsecured debts must be less than $394,725 while secured debts must be less than $1,184,200. In most cases, you can file for Chapter 13 protection as soon as your last case has been discharged. A Chapter 13 bankruptcy attorney in Brooklyn can help you determine if this is the appropriate form of bankruptcy for you.
Bankruptcy Cases Can Be Converted
If you are struggling to keep up with Chapter 13 repayments, it may be possible to convert it to a Chapter 7 case. After filing for Chapter 7 protection, you may decide that changing it to a Chapter 13 proceeding is in your best interest as it allows you to keep property. An attorney from Ursulova Law Office may work to protect your rights regardless of what type of bankruptcy you decide to pursue.
