Q: I live in Michigan and need to file bankruptcy. Should I file chapter 7 or 13 ?
My husband ran up some bills and we cannot pay them. Our interest rates are around 25%. I would like to get rid of these debts and start over. I am not sure which chapter of bankruptcy to find.
A: My general rule of thumb is that if you qualify for a chapter 7 and there are no negative effects in your filing a chapter 7 then you should file a chapter 7. The filing of a chapter 13 bankruptcy is sometimes required. A person that has previously filed a chapter 7 within the previous 8 years can only file a chapter 13. Likewise a the debtor fails the means test that is required to be filed with almost all bankruptcies. There are situations when a debtor has property that is valued above the exemption, meaning that the chapter 7 trustee would sell the property, where the filing of a chapter 13 bankruptcy would allows the debtor to keep that property and upon the completion of the chapter 13 bankruptcy the debtor would receive the benefits of the bankruptcy discharge of debts. A chapter 13 bankruptcy can stop a foreclosure on a debtor's house if it is filed before the sheriff sale. Likewise is some instances a chapter 13 debtor can recover a vehicle that had been recently repossessed. There are numerous other reasons to file a chapter 13 bankruptcy. You should consult a competent bankruptcy attorney to determine which bankruptcy is most suitable for your needs.
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