Considering – Is Chapter 7 Right For Me?

: Chris Lee Law Firm

  Filed under: Chapter 7

Many people filing bankruptcy in Fort Worth ask about which type of bankruptcy is best for them. While either type of bankruptcy is likely to be helpful to those with large debt burdens, they each come with different considerations.

Consider This

The biggest consideration with Chapter 7 is the qualification standards. Not everyone is eligible to file for Chapter 7 and, instead, must meet income restrictions. In general, the rule about qualifying for Chapter 7 bankruptcy is that your income must be less than the median income level of the state. This determination is made through the means test, which evaluates your total debt burden and compares your income level to that of the median income level of the state.

If you do qualify for Chapter 7, you may find it to be very beneficial for resolving your debts. However, not all debts are best managed in Chapter 7. For example, secured debts like a mortgage or car loan are better served in a Chapter 13 case if you intend to keep possession of these assets. The reason is that secured debts must be repaid in order for you to legally keep possession. Since Chapter 13 is a repayment plan bankruptcy, these items are better protected than if they were to be entered into a Chapter 7; whereby they would be liquidated in order to satisfy the debt.

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