Should I File Chapter 7 or Chapter 13?

So you have made the decision to file bankruptcy and get a fresh start.  Now you have the daunting task of deciding whether to file for Chapter 7 or Chapter 13.  A Chapter 7 is a legal process in which a debtor's assets are liquidated in order to pay creditors.  In a Chapter 13 a debtor reaches an agreement with his creditors to pay back the debt monthly for a period of three to five years.

Most debtors can file for Chapter 13, however Chapter 7 requires an eligibility process called a means test. This test computes all of a debtor's assets and liabilities to determine the amount of discretionary money a debtor has on a monthly basis. You must qualify under this guideline in order to file for Chapter 7 bankruptcy.