Factors That Determine Which Branch Of Bankruptcy To Use

Posted on: 26 June 2020

When you start thinking about using bankruptcy to get out of debt, you should consider calling a bankruptcy law firm. You can contact a law firm to schedule a consultation visit, and the lawyer will help you learn your options during this meeting. One vital thing that takes place during an initial consultation is a review of your finances. The goal of this is to help you determine which branch of bankruptcy you should file. Here are the factors that affect this decision.

The Amount of Income You Have

Your income amount matters when determining which branch of bankruptcy that you can and should use. If you have a high income, you might only be able to use Chapter 13. If you have a low income, you will likely qualify for Chapter 7. If you want to learn a lot during your initial consultation visit, bring proof of all your income for the past six months. Your lawyer can use these documents to determine which branches of bankruptcy you qualify to use.

The Debts You Have

The second factor that affects this decision is your debts. The types and amounts of debts you have will not disqualify you from using one branch or the other, but it will help the lawyer determine which branch you should use. If you want to get accurate advice from a bankruptcy lawyer, bring a list of every debt you have. Additionally, bring a list of all your assets.

When listing your assets on the list, include the amount of cash you have and any valuable items you own. You must also add the current value of your home and cars.

When listing your debts, make sure you include every bill you have. If necessary, dig through your stacks of bills to find every single one. A bankruptcy lawyer can give you advice on which branch to file based on the debts you have.

Other Situations

Lawyers also factor in other situations when offering advice to clients that are considering bankruptcy. For example, the lawyer might ask if you are behind on your house payments. Anytime a person falls behind on their house payments, they risk losing the house to foreclosure. Only Chapter 13 can stop a foreclosure from occurring, so your lawyer might recommend this branch if you face this problem.

If you have questions about debt-relief solutions or want to know more about bankruptcy, visit a law firm today.