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Can I File for Chapter 13 Bankruptcy Even if I Qualify for Chapter 7?

Individuals who qualify for Chapter 7 must pass a means test to determine if low assets and income might prevent them from repaying outstanding debt. However, some people with relatively low income and assets can potentially negotiate repayment terms that make filing for Chapter 13 a viable option. As part of the restructuring process, an experienced Chapter 13 bankruptcy lawyer in Los Angeles can sometimes negotiate with creditors to obtain a reduction in the value of outstanding loans or other options that permit clients to take advantage of the benefits available in Chapter 13 bankruptcy.

For some individuals, Chapter 7 bankruptcy may represent a relatively simple method for wiping out credit card and other unsecured debt. However, the U.S. Courts identify certain advantages to restructuring debt and paying it off through Chapter 13. Some people may simply feel a moral obligation to repay their debt. However, some practical advantages include the following:

  • The potential to save a home from foreclosure
  • The ability to retain other secured assets by renegotiating the terms of loans
  • Simplification of loan repayment through consolidation
  • Protection of co-signers and other third parties who have shared liability with the debtor on consumer debt

Keep in mind that some consumers who qualify for Chapter 7 do not have the financial resources to repay outstanding debt through Chapter 13. Before making this important decision, you need to review your financial circumstances with a Los Angeles Chapter 13 bankruptcy law firm that can assess all available options and make sure you clearly understand what to expect in the process — and the likely outcome for each choice.

Filing Chapter 13 bankruptcy offers certain advantages that make it an attractive option for some people. However, you need to take a realistic look at the likely outcome of the process based on your unique situation. The Law Offices of Michael Jay Berger conduct a thorough examination of your finances, consider your personal goals and objectives and provide you with an honest assessment to help you make the best decision.

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