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Can You Choose The Type Of Bankruptcy Filling?
By Cornie Herring
In general, you can choose the type of for filling, under certain circumstances you may only eligible for certain type of filling. In most cases, debtors will choose chapter 7 for filling because it's fast, effective, easy to file, and doesn't require payments over time. Chapter 7 usually takes the least time to complete. Other common types of filling include chapter 12 and chapter 13.
Yes, you can choose the type of bankrupt filling but you may not eligible for it. Let see the criteria of filling for a few common types.
Bankruptcy - Chapter 12
If you are a farmer or a fisherman, for instance, you may consider chapter 12 filing. Chapter 12 filling is tailored for "family farmers" or "family fishermen" with "regular annual income". It is more streamlined, less complicated, and less expensive than chapter 11 (bankruptcy filling for large corporate reorganization).
Chapter 12 has allowance for situations in which family farmers or fishermen have income that is seasonal in nature. Thus, debtors with seasonal income will find it to be advantageous to file their under chapter 12. In additional, Relief under chapter 12 is voluntary, and only the debtor may file a petition under the chapter.
Bankruptcy - Chapter 7
Beside the farmer and fishermen, most ordinary debtors will choose chapter 7 as their filling type. The key factors of the popularity of this type are it does not need payments over time, easy to file and less expensive. However not every persons who are seeking of getting debt free by filling will be eligible to file under chapter 7. To be eligible for chapter 7 filling, you must meet the below criteria:
- You must pass the median income test:
You calculated average income must not more than the median income for your state (You can find the median income by state information from www .usdoj.gov/ust; click the Mean Testing Information).
- If you failed the median income test, you second chance for chapter 7 filling is on mean test:
Mean test is calculated based on your disposable income. To get your disposable income, calculate your average monthly income as describe in above paragraph. From
that amount, subtract your allowed expenses (stated in IRS) and monthly payments you will have to make on secured and priority debts. If your monthly disposable income after subtracting these amounts is less than $100, you pass the means test, and will be allowed to file for Chapter 7.
Bankruptcy - Chapter 13
You will be forced to file your under chapter 13 if you are not eligible for chapter 7. Or if you have file before under chapter 7, then you need to go for chapter 13 for second filling.
Chapter 13, which has also been known as a wage earner's plan, is an interest-free repayment plan where a debtor repays at least some of his or her unsecured debts with regular payments over five years.
In chapter 7 filling, debtors need to liquidate their assets to pay to their creditors (creditors will share the amount from the liquidation); whereas, the debtor generally can continue to live in his or her home so long as the debtor complies with the terms of the Chapter 13 arrangement. This is one of the advantages of chapter 13 over chapter 7 filling.
In Summary
If is your ultimate option to get out of debts, you can choose the type to be file against, but you may not eligible for the type of your choice if you do not meet the required criteria. The best way to confirm it is check with attorney on which type you are eligible for. Free Article brought to YOU by ArticlesOn.com, where you'll find Articles On Everything! Visit http://articleson.com to get more free content. Cornie Herring is the Author from www.StudyKiosk.com. "StudyKiosk-Credit Basics" is an informational website on credit basics, debt consolidation and bankruptcy.
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