When is Chapter 13 Preferable to Chapter 7 Bankruptcy?
When the burden of debt gets out of hand and there are creditors hounding you on a daily basis, the prospect of bankruptcy protection can be very appealing. While Chapter 7 is frequently the more attractive choice due to the ability to discharge the most unsecured debts, there are specific requirements for Chapter 7 eligibility that you may not meet.
If your income over the last six months was higher than the median for a household of your size and your disposable income is too great, you will not be eligible for the options afforded to debtors by Chapter 7 bankruptcy. Determining eligibility can be complex, but a skilled attorney can help advise you on how best to proceed.
Chapter 13 Advantages
In some situations, Chapter 13 may offer a more appropriate solution to your unique financial situation, even if you are eligible for Chapter 7. Filing for Chapter 13 bankruptcy has the following advantages:
- You can keep your car or house even if you are behind on payments.
- Your co-debtor cannot be pursued for debts following your filing.
- You may be more favorably viewed by prospective creditors in the future because you paid your debts.
- It allows you to restructure the terms of your repayment agreements with creditors.
There is no universally applicable rule of thumb in deciding whether to pursue Chapter 7 or Chapter 13, and it is advisable to consult with a compassionate and competent Houston bankruptcy lawyer about your own situation.
If you have questions about what type of bankruptcy is right for you, the Houston bankruptcy attorneys at the Law Offices of Russell Van Beustring, P.C., can help. Contact us by calling 713-973-6650 today.