Making the decision to file for bankruptcy is a crucial first step toward reclaiming your life from debt, but which program should you file for? The bankruptcy code provides several different options, each designed to help borrowers in specific circumstances. Robert A. Schwartz, a Rochester bankruptcy attorney with over 30 years' experience, explains that both Chapter 7 and Chapter 13 bankruptcies have their own benefits to offer and criteria to meet before your petition can be approved.

Chapter 7 Bankruptcy: Passing The Means Test

A Chapter 7 liquidation is reserved for those borrowers who simply do not have the resources to pay back their financial obligations. To qualify, you'll first have to determine how your monthly income compares to the average of your state. If you make less than the average, you automatically qualify to file for a Chapter 7 bankruptcy.

However, borrowers with above-average income can still qualify if their expenses are high enough. The “means test” involves subtracting some expenses, like housing costs and car payments, to calculate your available monthly income. If the leftover resources every month are below a certain level, you may still file a Chapter 7 bankruptcy petition.

Chapter 13 Bankruptcy: Providing Sufficient Income

The eligibility requirements for a Chapter 13 bankruptcy are almost the exact opposite of Chapter 7. To qualify, you must demonstrate that you have enough disposable income to keep up with your regular payments while making the monthly bankruptcy payments. These calculations are often extremely complex, so you should always seek the advice of a bankruptcy attorney before filing. Furthermore, your secured debts must be less than $1,184,2000, including your house and car, and you must have filed income tax returns for the four years previous to your filing date.

No matter what your financial situation may be, you can rely on Robert A. Schwartz to help you find the debt relief solutions you need. Visit their website to learn more about their bankruptcy services, or call (585) 351-2929 to find out which bankruptcy program would be right for you.