Midlothian Bankruptcy Attorney On The Reason To File Chapter 13 Over...

There are two basic reasons why a person would file a Chapter 13 bankruptcy.  One is that you don’t qualify for a Chapter 7 because you make too much money or that you want to save a piece of property that would be vulnerable in a Chapter 7 bankruptcy because you are behind on the payments or there is significant equity.  Let me explain further. 

In order to qualify for Chapter 7, you have to be lower than a certain median income level.  But in Chapter 13, there is no such requirement.  Also, in Chapter 7, you are saying to the court that I really have no money to pay back my creditors anything.  Often times they will have equity and things like their house or their car which would be vulnerable in a Chapter 7.  

Also, there is a third reason while someone might file a Chapter 13 bankruptcy instead of a Chapter 7.  That is they have certain debts that are non-dischargeable in Chapter 7 such as parking tickets, tax debt or municipal fines.