You work hard every day, yet the bills keep piling up. The phone rings constantly with calls from collectors. You feel trapped and the stress affects every part of your life. If this sounds familiar, you are not alone.
Many people feel ashamed about bankruptcy. However, this legal process may help you get out of debt and start over. Fortunately, the U.S. Bankruptcy Code offers several ways to find relief. Here are six ways you can file for bankruptcy:
Chapter 7: A clean slate
Chapter 7 offers the fastest way to get rid of debt. It wipes out most bills like credit cards and medical expenses. To qualify, you must pass a means test that looks at your income. Additionally, a trustee may also sell some of your things to pay creditors.
However, Louisiana law protects certain items, but only up to specific value limits. If your home or car has equity beyond those limits, you could lose them. Chapter 7 typically works well for many people. But if you want to keep property with value, Chapter 13 might be a better choice.
Chapter 13: Keeping your property
Unlike Chapter 7, Chapter 13 lets you keep your home and car regardless of their value. You pay back your debts over time through a payment plan. Because of this, you need a steady income to qualify.
This option works well if you have missed mortgage payments but want to catch up. It can also help with tax debts that Chapter 7 cannot erase. Of course, business owners face different money problems. They may need another option.
Chapter 11: Business reorganization
Chapter 11 usually helps businesses pay off debt while staying open. Workers may still keep their jobs and customers can still get services. People with very large debts can also use this option.
This process usually costs more and takes longer than other types. Even so, it lets you work out new payment terms with creditors. Meanwhile, some Louisiana workers face unique challenges tied to the seasons. Hence, they have a special option too.
Chapter 12: Help for farmers and fishers
Chapter 12 helps family farmers and fishermen. These workers often earn most of their money at certain times and seasons of the year. Because of this, Chapter 12 offers payment plans that fit their seasonal income.
You must earn regular yearly income from farming or fishing to qualify. This protection helps keep Louisiana’s farming and fishing traditions strong. But beyond these options, two other types serve special purposes.
Chapter 9 and Chapter 15: Special cases
Chapter 9 applies only to local governments like cities and school districts. Similarly, Chapter 15 handles bankruptcy cases that involve other countries. Most regular people will never need these options. Still, they play important roles in the legal system. Now that you know all six types, you may wonder which one fits your situation.
Choosing the right type for you
The right choice depends on your unique needs. Your income, debt and goals all matter in this decision. Filing for bankruptcy is not a sign of failure. Instead, it gives you a chance to rebuild your finances. A legal professional can review your situation and guide you through each step.
You have worked hard to get where you are. Now, take the next step toward the fresh start you deserve. McBride Law Firm only handles Chapter 7 and Chapter 13 cases.