Filing for bankruptcy is never a decision that should be entered into lightly. After all, bankruptcy, while it can ultimately be positive for the filer in the long term, does still have negative consequences, and some types have more than others.
For individuals, the two main types of bankruptcy to choose between include Chapter 7 and Chapter 13. Which type, out of these two, a person should and can file depends upon various factors, such as his or her overall income, as well as his or her disposable income. No matter what one’s income, however, determining which chapter to file should be based on the help and advice of a professional.
Chapter 13 Bankruptcy
For those with higher amounts of disposable income, Chapter 13 bankruptcy may be the best and/or only option. This type of bankruptcy allows a person to reorganize his or her debts, allowing the person to pay them off in a more manageable way.
Chapter 7 Bankruptcy
Chapter 7 is often seen as the easier option, at least short-term, since it allows the person to basically wipe out debts and to start fresh.
Both types of bankruptcy do have their consequences and will stay on the filer’s credit for a set amount of time. With that said, however, both types of bankruptcy also have advantages and can ultimately benefit a person and give him or her a brighter financial future in the long run.
It is key, though, to file the right type of bankruptcy for your situation, goals, and needs, which is why you should always take the all-important step of hiring a professional bankruptcy attorney to assist you throughout the process.