Once you have decided that you will file for bankruptcy, you will have to contact an attorney to proceed further. When it comes to declaring bankruptcy, you will have to decide which option is right for you. Most people opt for either Chapter 7 or Chapter 13 of bankruptcy. However, you have to figure out which is the best-suited as per your financial condition. A Katy bankruptcy lawyer can also help you make the right decision. Some of the contributing factors are mentioned as below:
Duration of proceedings
The important factor that contributes to choosing the right option is time. Chapter 13 offers a repayment plan that may last for about three to five years. On the other hand, Chapter 7 of bankruptcy takes lesser time to complete. It may take up to a few months right from the start until the case is discharged. Depending on your financial condition as well as the time that you can spare to complete the case, the attorney can suggest the best way to deal with bankruptcy.
Your monthly income
Another factor that plays a vital role in deciding which chapter is suitable is your regular income. Chapter 7 of bankruptcy is suitable for those, who have low or no income at the moment. After assessing the median or mean income, an attorney can suggest you this option. On the contrary, Chapter 13 is suitable for those who have a regular monthly income because, in this type, the repayment plan is created. Therefore, the person has to pay the installment for a specific period of time.
Property owned
It should be noted that if you have a property or assets, it would affect bankruptcy proceedings. In chapter 13, your property is not liquated as a part of proceedings whereas, in Chapter 7, any asset or non-exempt property can be liquated to pay off the debts and pending payments. This way, the debts are settled and creditors are satisfied.
Foreclosure of home
Finally, the foreclosure proceedings can also affect the type of bankruptcy. The foreclosure proceedings may face automatic stay in the case of Chapter 13 and Chapter 7. Under Chapter 13, the repayment place is worked out whereas if the person is unable to pay under Chapter 7, the foreclosure proceedings will be applicable.
To find the best bankruptcy lawyer in your city, it is recommended to search online because a number of lawyers have their official sites to contact them.
