You have experienced financial difficulties for several months, but you tried unsuccessfully to get your head above water and conquer your insurmountable debt. You realize that the time has come to consider filing for bankruptcy. A bankruptcy discharge could solve many of your problems, you realize, but you also worry that you might not qualify for Chapter 7 because you have a steady income and may not pass the means test. You and other Connecticut residents may benefit by learning how a Chapter 11 bankruptcy could be the better option.
As you may know, Chapter 11 restructures your debt and allows you to make manageable payments over a period of three to five years, unlike Chapter 7, which discharges your eligible debt. However, those who qualify for Chapter 7 may lose their homes, extra vehicles and other assets to repay creditors before receiving their discharge. FindLaw explains that if you want to keep your home and vehicles, and you have a steady job, Chapter 11 could be your route to debt relief.
You might also find Chapter 11 bankruptcy preferable if you feel guilty about discharging your credit card and medical debt. This option can give you the peace of mind of knowing that you will be able to pay your bills. After your payment plan has ended, the remaining debt may be discharged, further providing relief.
Each person’s situation is unique, and an option that works for one family may not be ideal for yours. Therefore, the information in this post is meant to educate you but should not be substituted for legal advice.