When is bankruptcy a good option?
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When is bankruptcy a good option?
I owe approximately $10,000 in medical bills, a consolidation loan, apartment move out costs, etc. I have a child but only a part-time waitressing job. I now live with my parents.
Asked on February 21, 2012 under Bankruptcy Law, Michigan
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Bankruptcy is advisable when debts exceed assets.
Chapter 7 bankruptcy is straight liquidation which eliminates your debts. Chapter 7 would be your preferred option and it would appear that you are eligible. If you are not eligible for Chapter 7, filing Chapter 13 would be an alternative; however, Chapter 13 bankruptcy requires a plan (budget) for repayment of creditors. It would be advisable to speak with a bankruptcy attorney.
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