I have been asked this question many, many times over my thirty two years in practice. I normally have a discussion with the person who asked this question around their individual finances. I start with finding out how much money they bring home each month as a family. This includes all sources of income. I then find out what their basic living expenses are each month. This amount does not include payments that are made on charge cards, old medical bills, or credit cards. I then simply subtract the basic living expenses from their net income to see if they have any money left over. If they cannot get by each month without putting food or other necessities on a charge card or borrowing money from relatives or friends, then they need to think about filing a bankruptcy.
Which type of Bankrutpcy is right for me?
Chapter Seven is the most common type of bankruptcy that is filed. Basically, in a Chapter Seven, you are discharged or forgiven bills such as credit card balances, charge card balances, medical and dental bills, car repossessions or other similar bills. The case is normally over and done with in 90 days. The Court will assign a Trustee to your case who looks at your property and sees if you have equity in an individual item that exceeds the Missouri exemption statutes. The most common property issue I see involves income tax refunds in the Spring of each year. The Trustee will conduct a Meeting of Creditors approximately 30 days after the case is electronically filed. The debtor(s) attends this informal hearing at the Courthouse. In a Chapter 13, you will make a plan payment to the Trustee for between 36 and 60 months. Most people go into a Chapter 13 because they are behind in their house payments, have filed a recent Chapter 7 bankruptcy, or they have too much equity in an individual asset. Most people try to avoid getting put into a Chapter 13 if they can in any way avoid it.
