Many Connecticut residents are struggling to keep their heads above financial waters. Some are merely experiencing minor setbacks and simply have to cut back on spending a bit to get things back on track. For others, however, additional measures might be necessary, such as exploring debt relief options, including the possibility of filing for Chapter 7 or Chapter 13 bankruptcy.
Without a background in bankruptcy law, it can be difficult to determine which option best fits a particular situation to help resolve major financial problems. There are benefits to both, but what works for one person may not even be a possibility for another. There are many determining factors, such as whether the individual qualifies under the means test that is required in Chapter 7 proceedings.
This test assesses whether a individual’s current income exceeds the mean in his or her home state. If so, or if he or she is able to use disposable income to repay debts under a restructured plan, then Chapter 7 may not be an option. However, Chapter 13 typically allows a filer to make payments pursuant to a court-approved plan toward what is owed until the debt is satisfied within three to five years.
Chapter 13 can also help a homeowner stop the foreclosure process, providing no other filings for bankruptcy occurred in the past two years. On the other hand, Chapter 7 generally (but not always) involves complete liquidation of all assets in order to pay creditors. To seek clarification of bankruptcy laws and discuss a particular situation, anyone in need of guidance may request a meeting with an experienced debt relief attorney in Connecticut.
Source: FindLaw, “Chapter 13 vs. Chapter 7 Bankruptcy“, Accessed on Feb. 8, 2018