Which bankruptcy you should file really is a question that should be discussed directly with a lawyer. I often have people come in wanting to file a chapter 7 who, after our conversation, realize a chapter 13 is what they need. Likewise, some of my clients who come to me expecting to have to file chapter 13 realize I can get them the same bankruptcy relief through chapter 7 for less money and more quickly. So, if you don’t get anything else out of this article, realize that in our direct-to-consumer world, it is tempting to try to cut the lawyer out of the process, and understandably so. After all, if money was no object, you probably would not be reading this website right now. On the other hand, many people have learned the hard way that trying to save money by a do-it-yourself bankruptcy can be the financial equivalent of tripping over dollars to pick up dimes. Your best bet is to retain a qualified bankruptcy lawyer in the Topeka area to assist you in determining which chapter of bankruptcy will be of maximum benefit to you. When you are talking about individual people contemplating bankruptcy, they generally are going to be choosing between chapter 7 and chapter 13. And with some very rare exceptions, chapter 11 is used by individuals to reorganize their debts. But chapter 11 is rare enough that I will not discuss it in this blog article. Chapter 7 is the most common form of bankruptcy, and it is usually cheaper and faster than chapter 13. However, it serves different purposes than chapter 13. Chapter 7 is often times referred to as a “straight bankruptcy” or “liquidation bankruptcy.” In a nutshell, the bankruptcy debtor gets to discharge all dischargeable debts, and in exchange for the discharge the bankruptcy trustee will liquidate any of the debtor’s non-exempt assets and use the money from that liquidation to pay off creditors to the extent money is available. Chapter 13 on the other hand is not a straight liquidation bankruptcy. And usually it is not a straight reorganization bankruptcy. What I mean by this is that chapter 13 generally proposes to reorganize some debts (i.e. reorganize how a mortgage arrearage is paid to avoid foreclosure, how a car is repaid to avoid repossession, etc.), while still discharging some debt, particularly in the case of unsecured, non-priority creditors. If the household of the debtor is above the median income, he and/or she will usually only be required to pay unsecured, non-priority debts in the bankruptcy plan to the extent calculated on the Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period, also known as Form B122C. There are many considerations to look at when contemplating one chapter of bankruptcy over the other. And when you do file bankruptcy, you can rest assured that many of the debt collectors will have attorneys of their own reviewing what you file. You owe it to yourself to seek out legal representation from a Topeka bankruptcy attorney who will provide you with the guidance you need to protect yourself, your family, and your assets.
by Adam Mack
