People often wonder which type, or chapter, of bankruptcy is best for them — Chapter 7, Chapter 13 or Chapter 11. In most cases, the type of bankruptcy will depend on what you qualify for and what provides you with the greatest benefits. In some cases, there may not be a choice. When there is, that choice must be made based on the specifics of your situation.
In some situations, it may make sense for someone who qualifies for Chapter 7 to file Chapter 13, or for someone eligible for Chapter 13 to file Chapter 11. Balbus Law Firm is knowledgeable about all three major types of bankruptcy, ensuring that every option will be considered in recommending the choice that is best for you.
The Major Types Of Bankruptcy
Chapter 7 bankruptcy is by far the most popular choice. You get to discharge most, if not all, of your unsecured debts, while keeping all of your earnings in the future. But, you must give up all of your non-exempt assets. Fortunately, most people in Connecticut and New York generally can keep their house, car and other assets under state or federal exemption law. Determining what assets you may keep requires careful analysis. If you have significant non-exempt assets, other bankruptcy chapters would be considered. Qualifying for Chapter 7 requires a careful analysis of your income and the type of debt you have.
Chapter 13 bankruptcy is like a debt consolidation plan in which you pay creditors a portion of your debt over a three- to five-year period based upon your disposable income. Determining what your disposable income is and how much you will have to pay creditors can be complicated. Often people are better off trying to settle their debts outside bankruptcy than paying a larger percentage of their debts in Chapter 13. In addition, there are limitations on the amounts of secured and unsecured debt you can have and still qualify for Chapter 13.
Chapter 11 bankruptcy is a reorganization in which debts can be restructured or renegotiated, assets can be sold, and contracts and leases can be terminated. It is usually used by businesses, but can also be used by individuals with high incomes and high debts. Because Chapter 11 requires the confirmation of a plan of reorganization by a bankruptcy judge after voting by creditors, the process is longer, more complicated and more expensive than the other types of bankruptcy.
Assessing The Different Types Of Bankruptcy
To learn which bankruptcy is best for you in a free initial consultation with a knowledgeable lawyer well-versed in each type of bankruptcy, call 203-286-4121 or email us.
Balbus Law Firm is a debt relief agency. We help people and businesses in New York and Connecticut file for bankruptcy relief under the Bankruptcy Code.