I see it all. Whether or not one should decide to file for bankruptcy is a question of simple math, Stevens said. Chapter 7 bankruptcy is a liquidation and is designed to eliminate honestly incurred unsecured debt. If the debtor had been in an automobile accident and was being sued by different medical providers, Chapter 7 would likely be appropriate, Stevens explained. Chapter 13 bankruptcy is an individual reorganization where a plan is submitted to the court in order to repay debt.
Any source of income is sufficient to fund a plan.
Chapter 11 is a highly complex business-type reorganization, although individuals can file under this chapter as well. With Chapters 11 and 13 bankruptcy, not all debt is necessarily repaid. When deciding to file bankruptcy, one should go to an attorney so that their needs may be assessed, suggested Stevens. The overall financial situation needs to be analyzed, he said. It s a balancing process.