Choosing the Right Type of Bankruptcy
Unless you are filing for bankruptcy as a business, you will have two options – a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.
- Chapter 7: Also known as a liquidation bankruptcy, this will allow you to wipe out most of your debts. However, you will have to pass the means test. If your income is not low enough, you will be ineligible. If you cannot file a Chapter 7 bankruptcy, you would likely be eligible for a Chapter 13 bankruptcy.
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- Chapter 13: Also known as a reorganization bankruptcy, this will allow you to keep your property and catch up on payments you fell behind on. However, you will have to repay a portion of the debts you owe through a structured repayment plan that lasts 3 to 5 years.
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