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How to Tell What Type of Bankruptcy Is Right for You

Most people don't want to file for anything under United States Code Title 11, for understandable reasons. However, the one thing more frustrating than declaring bankruptcy is trying to file for the wrong type. Here are a few types of the status and their defining characteristics.

Liquidation

Liquidation, or Chapter 7 bankruptcy, is a good choice for you if you very low disposable income. It's also an excellent choice if you have very few valuable items that can be liquidated, such as heirlooms or extra vehicles and homes. Also, be careful of any heirlooms or valuables you have, as these will also be liquidated to cover your debts. In return for liquidating your belongings, you'll receive a discharge on your unsecured debt.

Individual Debt Adjustment

Chapter 13 is designed for people who can pay back some of their debt. This is different from credit counseling services, which charge interest and require a third party mediator to negotiate with creditors. Chapter 13 can also handle some tax debts and help people stay in their homes. This type of bankruptcy allows for a much longer mortgage repayment plan than most any bank.
Calling or emailing a lawyer who handles Title 11 cases to assess your case is crucial to your success in bankruptcy. Make sure you use any knowledge you gather to supply the right information to your attorney. Call Hickson Law PC at 512-900-4460 if you need assistance.