Q: I have charge cards bills adding up to $12000 do I do a chapter 7 or 13?
A: The amount of debt is not the determining factor for you. The question is whether you have assets and whether you make too much money to file a chapter 7. In a chapter 7, you get to keep only what is exempt under the state or federal exemptions. The exemptions in PA are limited, so if you have a house or car, you would probably want the federal exemptions. Assuming that all your assets would be exempt in a chapter 7 the next question is whether you meet the income test. Each state is different and you would need to sit down with a bankruptcy attorney to see whether you make too much money. If you do, then you cannot file a chapter 7 and have to file a chapter 13.
The difference between the two is this - with a chapter 7 you keep all your assets if they are exempt. You file your petition and schedules, have your meeting with the creditors and then get a discharge. If you have too much income, or too many assets or you are behind on your mortgage and want to save your home, then you have to file a chapter 13. In a chapter 13, you keep all your assets but you come up with a plan as to how you will repay about 25% of your debt over a 3-5 year period. However, to do a chapter 13 you must have a steady income stream so as to be able to make all of your payments.
Your credit card debt is not all that bad. Bankruptcy has consequences of its own. So its something you need to consider carefully. Many bankruptcy attorneys give free consults and you should definitely get one. You should also educate yourself on the bankruptcy process - www.thebankruptcysite.org or www.legalconsumer.com are a few places where you can go to get information and see for yourself as a preliminary thing whether you would qualify for a chapter 7 or not.
If you just want to be done and can file a chapter 7, that may be the way to go. However, your debts are not all that bad. There are other options too. If bankruptcy is not right for you, I have some non-bankruptcy alternatives suggestions for dealing with your debt. Please email me at firstname.lastname@example.org if interested.
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