Which is the best option: chapter 7 or chapter 13?


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best chapter bankruptcy-law

Which is the best option: chapter 7 or chapter 13?

Your business cannot file a Chapter 13 in most cases; it must choose between Chapters 11 and 7 instead. If you are self-employed, you can file a Chapter 13, in which case you’ll be permitted to continue running your business, subject to some additional requirements. If you are self-employed and considering bankruptcy, you should consult a bankruptcy attorney before doing so.

If you are filing as an indiviudal, the type of filing really depends on your financial picture. Each has pros and cons.
An individual socked with serious financial difficulties most likely will find Chapter 7 straight bankruptcy proceeding as the preferred type. A Chapter 7 proceeding, used by approximately 70% of all consumers filing bankruptcy petitions, is faster to complete, giving the debtor a financial “fresh start” without the years of sacrifice. On the other hand, a Chapter 13 plan offers an alternative if the debtor has a steady income, a stable job, and wants to pay off most or all of his or her debts.
The Bankruptcy Code now includes a means test, which your bankruptcy lawyer will apply to determine whether you can afford to pay off a portion of your debts in a Chapter 13 plan. If you can, in most cases, the law requires you to proceed under Chapter 13.
(Reviewed 11.9.08)

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