When you are confronted by a mountain of unpaid bills and desperately needing to stop repossession, someone might suggest filing for personal bankruptcy. Filing for bankruptcy might stop foreclosure and offer you debt relief, but deciding which type of bankruptcy is the correct one for you requires the assistance of a bankruptcy attorney.
There are two types of individual bankruptcy: A Chapter 7 bankruptcy and a Chapter 13 bankruptcy. Either of them will help you to stop repossession or stop foreclosure, but the differences between the two could make one of them better for your particular circumstances than the other.
For example, there is an eligibility requirement for a Chapter 7 bankruptcy that is based upon your income. If the cause of your financial challenges is unemployment, that might work in your favor as far as meeting the income guidelines. A Chapter 13 bankruptcy is available for individuals whose income is too high for a Chapter 7.
Another factor that could sway your decision as to the type of personal bankruptcy that is right for you would be the real and personal property that you own and wish to retain after the bankruptcy. Nonexempt property must usually be turned over to the trustee for sale to satisfy all or part of your debt in a Chapter 7 bankruptcy. This is not the case in a Chapter 13.
There are other significant differences between the two types of personal bankruptcy that a Louisville, Kentucky, bankruptcy attorney can explain to you. Filing for bankruptcy can help you to eliminate debt and obtain debt relief, but it is important to choose the type of bankruptcy that is best suited to your financial circumstances. This post is not intended to be relied upon, nor is it offered as, legal advice that should only be obtained from a qualified attorney.