Not all bankruptcies are equal. Each type of bankruptcy is specifically designed with certain rules and regulations in regards to income limits and assets. When you make the decision to file bankruptcy, you need to carefully consider which type of bankruptcy is best for your unique situation.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy has specific income limits that you must fall below in order to declare. If your income is over the limit, you will be required to file chapter 13 bankruptcy. In chapter 7 bankruptcy, your non-exempt assets are liquidated in order to offset the outstanding debts, and whatever is left over is usually wiped out, with a few exceptions. Chapter 7 bankruptcy is ideal for individuals or families with a significant amount of debt and a low income, and who don’t own a great deal of valuable assets.
Chapter 13 Bankruptcy
If your income limit is too high, chapter 7 bankruptcy will not be an option for you. Chapter 13 bankruptcy does not involve the liquidation of assets and the clearing of debts – it instead involves negotiating a reasonable payment plan for your debts. The court will decide how much of your income is disposable and can be put towards your debts, and you will be put on a strict 3-5 year repayment plan. The court will appoint a trustee who will oversee your finances during this time.
At the Kalra Law Firm, we have an intimate knowledge of both types of bankruptcy and will thoroughly investigate your unique situation to determine which type of bankruptcy would be best suited for your circumstances and leave you with the most favorable outcome. Call us today for a bankruptcy consultation. (310) 325-9012.