Which Type of Bankruptcy is Best For You?

Before you file for bankruptcy, you must first decide what type of bankruptcy will work best for you. Although many people attempt to file for Chapter 7 bankruptcy, in which your debts are pardoned, more people will qualify for Chapter 13 bankruptcy.

If you are serious about paying off your debts but need to be protected by a bankruptcy court while you do so, then Chapter 13 bankruptcy is right for you. Many people are now using Chapter 13 bankruptcy to save their home from foreclosure or having their automobiles repossessed. This is not possible in Chapter 7 bankruptcy, whereas in Chapter 13 bankruptcy you can create a repayment plan to stay on track with payments, but at a level at which you can afford to make them.

It is possible to file for Chapter 13 bankruptcy and switch to Chapter 7 later on. This is most applicable to people who find themselves becoming negligent on payments, even after their payments have been reduced. However, if you do want to keep some of your non-exempt personal items, like property, you must file for Chapter 13 bankruptcy to have a better chance of doing so.

If you would like help deciding which type of bankruptcy is best for you, contact our legal team to receive direction from a Chicago bankruptcy attorney.