There has to be a clear and easy answer to that headline-posed question above, right? After all, Chapter 7 and Chapter 13 are clearly distinct bankruptcy options with altogether different parameters. Shouldn’t there be a relatively quick and simple process for determining the road to take in seeking the financial relief provided by bankruptcy?
Well, there is undeniably a process, but few people would deem it so slam-dunk simple that a debtor can arrive at a sound conclusion over a cup of coffee.
You see, there are formulas and so-called “means testing” involved that help a consumer determine the optimal path to take. A debtor might indeed qualify for one, but not the other, form of bankruptcy. In some instances, a party might be able to file for either Chapter 7 or Chapter, necessitating a well-considered choice.
Thus, here’s the answer to that question: It’s probably not immediately apparent what type of bankruptcy will best avail a would-be filer, but the preferable choice will likely emerge with strong clarity after relevant due diligence activities are fully pursued. As stated, either course can be pursued in some instances, while, in other cases, testing outcomes will make it clear that a party has no choice in what type of bankruptcy to file.
There is actually a lot to learn about bankruptcy for anyone exploring the option, commencing with the basic differences between Chapter 7 — commonly referred to as a “liquidated” bankruptcy — and Chapter 13 (often referred to as a “reorganization”).
For most people in Texas and elsewhere, the learning curve will be steep. A proven debt relief attorney well-versed in bankruptcy representation can provide guidance and strong advocacy throughout the process.
Source: FindLaw, “Bankruptcy: Frequently Asked Questions,” accessed Oct. 14, 2014