Which Is Right?

Which Chapter of Bankruptcy Is Best?

Which chapter is best depends on the nature of your debt and the nature and value of your assets.


Chapter 7 is the most frequently selected kind of bankruptcy for individuals. The debtor receives a discharge of most unsecured debts within several months of filing the case. Most debts are dischargeable. A few debts including support, alimony, some taxes, and most student loans are not dischargeable.


Chapter 13 is frequently a better choice if:

you have debts that are not dischargeable under Chapter 7
you are in default on mortgages or car payments
you have too much income to file a Chapter 7 bankruptcy
you have more property than can be exempted from creditors in Chapter 7
you owe taxes or other debts that are not dischargeable in Chapter 7
To be eligible for Chapter 13, you must have regular income and debts below a certain level.

The choice of chapter depends on many factors particular to your individual situation,and is one of the most important reasons to get good legal advice before filing.