Which bankruptcy chapter should I file for?
In most cases, individuals decide to file for Chapter 7 bankruptcy, because it allows them to completely discharge most or all of their unsecured debts. Chapter 7 is advantageous because it is fast, easy, and allows the debtor to get on with his or her own life without having to bother making payments, as required under a Chapter 13 reorganization plan. Chapter 7 allows an individual to keep his or her car and house, and discharges all debts, except for student loans, taxes, and support payments (alimony, child support). So, why file Chapter 13? Many people feel that they have a moral obligation to pay back their debts, in which case Chapter 13 is the better option. Moreover, many people - who have adequate income - are forced into Chapter 13 by their bankruptcy trustees. Furthermore, in a Chapter 13 situation, debtors are only required to pay back what their assets are worth and not what is owed. Likewise, if most of your debts are nondischargeable (student loans, taxes, etc.), Chapter 13 allows you to pay those debt back over a period of time.