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Which Bankruptcy Makes Sense for Me?

When looking to file for bankruptcy, you might be asking, ‘which bankruptcy should I be filing?’ Remember that this is a big decision to help you get your credit, life, and personal finance goals back on the track you want. At the Yoon Law Firm, we will explore every possible avenue to help get your credit and personal finance goals back on track. There is nothing to feel embarrassed about when contacting our office. In fact, you should feel pride undertaking a big step toward this direction. Just think of no more debt, creditors calling about bills, and building a better credit score. These are just some of the many ways we can help you and your personal finance goals.

We will discuss your situation from top to bottom and figure out which type of bankruptcy you should file. The two most common types of bankruptcy are Chapter 7 and Chapter 13. Each type of bankruptcy has its benefits and protections from creditors. Each type also has its limitations, but having skimmed the surface level we will now explore them in detail. Chapter 7 is often referred to as liquid bankruptcy because you are likely to be selling personal assets to pay your debt. This type of bankruptcy wipes out most of your debt, such as credit cards, medical, and utility bills. When one files for chapter 7, the court issues an order called an “automatic stay” this helps to stop collection agency actions. To qualify for Chapter 7, you must meet a certain income threshold (calculated under a means test); if you exceed the said limit, you may have to file for chapter 13, which we discuss next. Chapter 7 is best for those with lower incomes with little or no personal assets.

If you can not file for Chapter 7, you may qualify for Chapter 13 bankruptcy. Chapter 13 is a program designed for debtors with a regular and sometimes higher income as well as in most cases own real property. Generally, the idea is that these debtors have the ability to pay back a certain amount to creditors at the end of the month through a payment plan. It simply offers more benefits unlike Chapter 7, which does not provide these benefits or options. Most debtors choose Chapter 13 due to being allowed to keep their personal property in exchange for a monthly repayment to creditors. Contact us at Yoon Law Firm to help secure a better financial future and a fresh new start. You’ll be thanking yourself for taking a step in the right direction.

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