Many individuals filing for bankruptcy assume that they can have a choice between either a Chapter 7 or Chapter 13 bankruptcy. Both of these have specific criteria that must be met in order to qualify. This determines which bankruptcy you will be eligible for.
In a Chapter 7 bankruptcy it is usually a liquidation of assets that takes place. In a Chapter 13 bankruptcy the process is an adjustment of debts so the individual has the opportunity to be able to pay them.
In order to file for a Chapter 7 bankruptcy an individual has to go through what is called a means test. And they also have to go through a pre-filing a session with a credit counsellor which has to be then registered with the bankruptcy courts. For an individual whose debts are below $360,475 and the secured debts are less than 1,081,400., they may be able to qualify for the Chapter 13 bankruptcy.
Something else that many individuals think is that a Chapter 7 bankruptcy is better than a Chapter 13. They believed that under the Chapter 7 that all of their debts are wiped out whereas with the Chapter 13 they are not. A Chapter 7 may be the ideal solution for individuals that have very little property, but a Chapter 13 is a much more viable solution for those that do have assets and want to be able to keep them.
The first step to take when considering going bankruptcy is to speak to a qualified Houston bankruptcy attorney. This expert will first explain which chapter of bankruptcy you qualify for and then will go into the details of what will take place during that bankruptcy. Bankruptcy is considered to be a form of financial relief and should not be considered as some type of punishment for not being able to meet your financial obligations