If you have reason to believe that bankruptcy is the best way to improve your finances and start fresh in the future, you need to turn your attention to a very important question: What type of bankruptcy is right for you?
As an individual, you have two basic options: Chapter 7 and Chapter 13. While there are some similarities between the two, there are also a variety of differences.
First things first, you need to determine if you meet the eligibility requirements for both Chapter 7 and Chapter 13.
Since the requirements for Chapter 7 are stricter, you may find that you don't qualify. This means that you will need to turn your attention to Chapter 13.
Those who have a choice between the two typically opt for Chapter 7, since they are able to have most of their debts discharged. Also, the process is much faster, with four to six months the average time it takes to receive a discharge.
Chapter 13 is usually better for those who don't qualify for Chapter 7 and/or have adequate income and assets.
The best thing you can do is compare the pros and cons of Chapter 7 and Chapter 13 bankruptcy. Once you have a list, you can move forward as to decide if you are eligible for both.
You can improve your situation with either type of bankruptcy, but you want to make the right decision based on your personal situation. This is why it's a must to learn as much as you can before making any decision.
Source: FindLaw, "Bankruptcy: Frequently Asked Questions," accessed July 14, 2017