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Unlike most bankruptcy firms in the Dallas / Fort-Worth area, Allmand Law Firm, PLLC spends the time to understand the complete financial picture for every one of our clients. We provide resources, tools and advice to address the unique needs of North Texans.

Filing Bankruptcy: Which Chapter Do You File?

Posted By Allmand Law Firm, PLLC || 14-Aug-2017

Every year, numerous Americans turn to bankruptcy as a means to find relief from insurmountable debt. These individuals, couples, and businesses come from all walks of life, and their financial situations are always unique. Because finances and filers are always different, the Chapter of the U.S. Bankruptcy Code you file under is a matter unique to you.

At Allmand Law Firm, PLLC, our Dallas bankruptcy lawyers prioritize personalized service and support because we know it is the most important element in a bankruptcy case. Unlike other firms that treat clients as if they are numbers, we don’t apply a one-size-fits-all formula when handling cases. We get to the bottom of our clients’ current financial situations, work to understand their needs and goals, and help them explore available options that can provide them with the benefits they need.

When it comes to selecting a Chapter of bankruptcy, most individual consumers typically file under one of two Chapters: Chapter 7 bankruptcy (also known as liquidation bankruptcy) or Chapter 13 bankruptcy (referred to as reorganization bankruptcy or the wage earner’s plan).

  • Qualifying – Due to laws that limit access to Chapter 7 bankruptcy to only certain consumers and require certain factors for those who file under Chapter 13, you might not always have a choice of which Chapter you can file under. This is because you need to meet qualifying criteria. This is important to understand, as you can’t simply choose a Chapter and launch into the process.
  • Chapter 7Chapter 7 bankruptcy is intended to help debtors who face the most pressing debt concerns. It is typically reserved for consumers who have little to no assets, and who do not have the financial means to continue making monthly payments toward pre-existing debts. In order to qualify for Chapter 7, filers must pass a means test that compares their monthly income to the median monthly income in the state of Texas. Generally, if your average monthly income is less than or equal to the state’s median income, you will be eligible for Chapter 7. If it is more than the state median, you will need to determine if you have enough disposable income to make payments. If your disposable income is too high, you likely will not be able to choose Chapter 7.
  • Chapter 13Chapter 13 bankruptcy is a wage earner’s plan that reorganizes debt and allows filers to make consolidated monthly payments toward them over three to five years. As such, filers must have enough available funds and income to make payments over the course of their reorganization plan. Chapter 13 bankruptcy doesn’t mean you don’t get a discharge, that still happens at the end of a plan. It also enables filers to keep certain property by paying back all or at least some of what they owe on property with pre-existing debt.

Your choice in which Chapter of bankruptcy to file under depends on qualifying criteria, your personal situation, and your ultimate goals for the financial future. Understanding the unique benefits of each Chapter, as well as how they will impact you, can be a difficult matter, which is why it becomes important to work with experienced attorneys like ours at Allmand Law Firm, PLLC. During a FREE financial empowerment session, our legal team can help you understand which Chapter of bankruptcy is best for you, and how we can help you take the right steps to navigate the process ahead. Contact us to get started.

Categories: Bankruptcy
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