What kind of Bankruptcy should I file ? Chapter 7, 11 or 13

WHAT KIND OF BANKRUPTCY SHOULD I FILE ?? CHAPTER 7, 11 OR 13

A Lawyer might say: it depends.

Here are some guidelines:

1.  Most people can file either a Chapter 7 or 13.

2.  If you are not qualified for a Chapter 7, then Chapter 13 is an option.

3.  If you are not qualified for a Chapter 7 or 13, then Chapter 11 is your best bet. However, remember, if you are filing a Chapter 11 bankruptcy, then you are moving around with the big boys with lots of rules to follow, and expensive legal fees.

4.   Almost anybody with a stream of income [including social security or disability] is qualified to file a Chapter 13.

5.   Chapter 7 is a liquidation bankruptcy and is usually filed by individuals whose expenses exceed income, who are below the median income, who have a lot of credit card or other unsecured debt, and no assets [cash, land, equity in cars, etc.]

6.    Chapter 13 filed by people who wish to pay a portion of their debt and/or who want to catch up on their mortgage or car payments and save their homes from foreclosure or cars from being repossessed or those individuals who cannot qualify for a Chapter 7 because they make too much money or because they have issues like..fraudulent transfers, receipt of large tax refunds, etc.

This is not an exclusive list. Therefore, it is important that you consult with a Bankruptcy attorney before making a decision. The one thing that I advise individuals contemplating filing a bankruptcy..do not try to do it on your own. Bankruptcy is complex. It is like jumping into quick sand. You will drown. I have seen too many instances where people have lost significant assets:

Example:

1. One case a paralegal filed her own Chapter 7 and lost her $250,000 annuity that she had purchased from the life insurance proceeds of her deceased husband. Annuities are usually exempt in a bankruptcy, however this one was deemed not exempt by a Bankruptcy judge because of the way it was set up, and timing of the purchase of the annuity.

2.  A postal worker lost $360,000 of tax free municipal bonds. He thought that just because they were tax-free that they were exempt in the Chapter 7 bankruptcy.

3.   One widow lost $250,000 life insurance proceeds from her deceased husband. She thought that since Life Insurance is exempt in a bankruptcy, the life insurance proceeds from her husband's policy are also exempt. He has died a few days before she filed her bankruptcy.

Attorney Dsouza practices in the areas of Bankruptcy, and may be able to assist you to plan for your bankruptcy legally. www.DsouzaLegal.com. 954-358-5911