People are struggling now more than ever to make ends meet. As your credit card debt increases and creditors start calling, you may wonder what your options are. It turns out that both Chapter 7 and Chapter 13 bankruptcy are legitimate possibilities. Both forms of bankruptcy can give you a fresh start and allow you to eliminate some, if not all, of your debts.

Chapter 7 vs. Chapter 13

When it comes to choosing between Chapter 7 and Chapter 13 bankruptcy, you will want to think about whether you are willing to liquidate or sell your assets and whether you can afford to pay some of your debts back over time.

With Chapter 7 bankruptcy, most of your unsecured debts, or debts without collateral, can be eliminated altogether if you sell your assets to pay what you owe. Some of the most common unsecured debts include credit card debt, utility bills, personal loans, medical bills and student loans.

Generally, for people with few assets and mostly unsecured debts, Chapter 7 bankruptcy is the best option. However, to qualify for Chapter 7 bankruptcy, you will need an income level that falls below the means threshold.

If your income level is too high for Chapter 7 bankruptcy, filing for Chapter 13 bankruptcy may be your best option. With Chapter 13 bankruptcy, you can come up with a repayment plan that allows you to pay off what you owe over a three- or five-year period. You will make payments every month and at the end of your repayment plan, any remaining debts will be discharged. The good news is that you will get to hold on to your assets.

An attorney can help you decide if bankruptcy is right for you

It can be hard to understand the complexities of filing for bankruptcy. A New Jersey attorney specializing in bankruptcy law can help you understand your options and help you move forward if you make the decision to file for bankruptcy.