Turner & O'Connell, Attorneys at Law
Serving Pennsylvania since 1984
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Which form of bankruptcy is right for you?

Your situation might feel hopeless if you are drowning in debt, but you always have options. One way to relieve this debt is to file for bankruptcy, though there are a few different types available. Chapter 7 and chapter 13 bankruptcy handle debt in different ways that could be a good fit for you.

An experienced bankruptcy attorney can discuss the following questions with you to guide you on the best course of action:

1. Do you qualify for chapter 7?

Not everyone can file for chapter 7 bankruptcy. You must pass a means test, which essentially measures your disposable income against the average in the area. Before considering chapter 7, you need to test whether you qualify.

2. Do you have assets you could lose?

One of the benefits of chapter 13 bankruptcy over chapter 7 is that chapter 13 protects your assets. One of the ways chapter 7 discharges debt is through liquidation, meaning your belongings could be sold to pay back some of the debt you owe. An attorney can help you to avoid losing assets but it is not guaranteed. You need to assess whether your assets would be at risk and which ones could potentially be liquidated.

3. How quick do you want the process to be?

Of course you want to get out of your situation as quickly as possible. It is very stressful and you are no doubt worried about what is going to happen. However, you need to really consider how dire your situation is.

One benefit of chapter 7 bankruptcy is the speed of the process. A chapter 7 bankruptcy could be resolved as quickly as three months. You should seek legal advice about the pros and cons of choosing it, but it may be a good choice for particularly difficult financial situations.

4. Do you have the means to eventually pay back your debt?

Rather than discharging debt completely like chapter 7, chapter 13 reorganizes all of your debt and creates a payment plan that you are able to manage. Over the course of the next few years, your debt payments are changed to better match your financial state. If you still have the ability to make some sort of payment that is different than your current plan, this can be a good option that also protects your assets.

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