Deciding whether to file for bankruptcy is a complicated and important decision. If it is indeed the right choice for you, you and your attorney will need to decide what type of bankruptcy to file, Chapter 7 or Chapter 13. Let’s take a look at the pros and cons of each.

Chapter 7 bankruptcy is also known as liquidation or straight bankruptcy. It is the simplest and usually the quickest form of bankruptcy. To be eligible for Chapter 7, you must first pass a means test, which examines your income and expenses and compares them with the norm for your geographic region.

Pros:

•No maximum or minimum amount of debt

•After asset distribution, balance is erased

•Creditors cannot claim wages earned or assets acquired after filing

•Proceedings go quickly, sometimes it’s over within six months

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