Which Type of Bankruptcy Should I File?

May 26, 2009

bankruptcy-main-imageBasically, if you have few assets, do not have a regular income or you do not have enough income to meet your basic needs and have something left over to help pay down your debt, then Chapter 7 bankruptcy might make the most sense for you. It will allow you to start fresh as quickly as possible, with the possibility of receiving a discharge of your debt in as little as a few months.

If, however, you have a regular income and can meet you basic living expenses with a little bit left over every month, your goal may be to reorganize your debts to a manageable level in order to pay your way out of debt. In this case, Chapter 13 bankruptcy would probably be the right choice.

In a Chapter 7 bankruptcy, all of your non-exempt property would be sold (“liquidated”), and the proceeds of the sale would be used to pay off a portion of your debts. If you have few assets, this type of bankruptcy may be the best option. For more information on which assets are considered exempt from sale in a bankruptcy proceeding, see the page on Chapter 7 bankruptcy.

If, on the other hand, you have a lot of non-exempt assets, such as a house, or you have regular income, you may have more to lose by having your assets liquidated to satisfy your debts, or a portion of your debts, than you would by creating a payment plan to pay off your debts over several years. In that case, you should probably consider filing for bankruptcy under Chapter 13. 

Contact our office for bankruptcy filing information and help.

Other related articles:

  • Who Should File For Bankruptcy?
  • Chapter 7
  • Chapter 13
  • How Do I Rebuild My Credit After Bankruptcy?

Picture courtesy of alsIdaho.com

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4 Responses to “Which Type of Bankruptcy Should I File?”


  1. Nice post… i would like to appreciate you work.


  2. A Chapter 7 Bankruptcy is normally filed by people as well as businesses who have little or no income left over after paying their basic living expenses (mortgage/rent, auto payment, utilities, food, insurance, etc).


  3. Very informative article for NY’ers.


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