Choosing the Bankruptcy For You

: Chris Lee Law Firm

  Filed under: Bankruptcy

bk choice

For consumers, there are two common types of bankruptcy. Chapter 7, the liquidation bankruptcy, and Chapter 13 the reorganization bankruptcy.

Chapter 7

Chapter 7 bankruptcy is the fastest and easiest form of bankruptcy. This bankruptcy is usually straightforward, and the whole process can be over in as little as three to six months. In Chapter 7 bankruptcy, the trustee will examine your assets to determine if anything is available to be sold and distributed to your creditors. Your exempt property can not be taken and sold. Due to the number of exemptions you are entitled to, most consumers lose little to no assets.

Chapter 7 is best for those with mostly unsecured debt such as credit cards, payday loans, medical debt, and past utility bills. At the end of the bankruptcy period, all qualifying unsecured debt will be wiped away. If you are behind on your secured debt such as your home or your car and you would like to keep those assets, Chapter 13 may be best for you.

Chapter 13

Chapter 13 bankruptcy works differently than a Chapter 7 bankruptcy. People usually file Chapter 13 when they are behind in their mortgage payments or vehicles that they would like to continue to use the collateral. You and your attorney will submit a plan to the court detailing how you intend to pay back the arrears. If the bankruptcy judge approves it, you will make a single monthly payment to the court for three to five years, whatever amount of time is agreed upon. At the end of your repayment period, any qualifying unsecured debt will be eliminated.


Some financial obligations will never be discharged in bankruptcy. Child support, alimony, current taxes, fines, and penalties owed to government agencies, and most student loans will not be eliminated. When you are able to eliminate most of your debt through bankruptcy, paying these non-dischargeable debts becomes easier.

If you would like more information on what type of bankruptcy would be best for your unique situation, contact a Dallas bankruptcy attorney today.

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