Can You Choose the Type Of Bankruptcy Filling?

In general, you can choose the type of bankruptcy for filling, under certain circumstances you may only eligible for certain type of bankruptcy filling. In most cases, debtors will choose chapter 7 for filling because it's fast, effective, easy to file, and doesn't require payments over time. Chapter 7 bankruptcy usually takes the least time to complete. Other common types of bankruptcy filling include chapter 12 and chapter 13.

Yes, you can choose the type of bankrupt filling but you may not eligible for it. Let see the criteria of filling for a few common bankruptcy types.

Bankruptcy - Chapter 12

If you are a farmer or a fisherman, for instance, you may consider chapter 12 filing. Chapter 12 bankruptcy filling is tailored for "family farmers" or "family fishermen" with "regular annual income". It is more streamlined, less complicated, and less expensive than chapter 11 (bankruptcy filling for large corporate reorganization).

Chapter 12 has allowance for situations in which family farmers or fishermen have income that is seasonal in nature. Thus, debtors with seasonal income will find it to be advantageous to file their bankruptcy under chapter 12. In additional, Relief under chapter 12 is voluntary, and only the debtor may file a petition under the chapter.

Bankruptcy - Chapter 7

Beside the farmer and fishermen, most ordinary debtors will choose chapter 7 as their bankruptcy filling type. The key factors of the popularity of this bankruptcy type are it does not need payments over time, easy to file and less expensive. However not every persons who are seeking of getting debt free by filling bankruptcy will be eligible to file under chapter 7. To be eligible for chapter 7 bankruptcy filling, you must meet the below criteria:

• You must pass the median income test:
  You calculated average income must not more than the median income for your state (You can find the median income by state information from www .usdoj.gov/ust; click the Mean Testing Information).
  
  


• If you failed the median income test, you second chance for chapter 7 filling is on mean test:
  Mean test is calculated based on your disposable income. To get your disposable income, calculate your average monthly income as describe in above paragraph. From that amount, subtract your allowed expenses (stated in IRS) and monthly payments you will have to make on secured and priority debts. If your monthly disposable income after subtracting these amounts is less than $100, you pass the means test, and will be allowed to file for Chapter 7.
  
  

Article Source: http://www.financemanual.com

Cornie Herring is the Author from www.StudyKiosk.com. "StudyKiosk-Credit Basics" is an informational website on credit basics, debt consolidation and bankruptcy.

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