When you struggle from major debts you cannot repay, you might decide to turn to bankruptcy. Bankruptcy does offer a lot of help for people in this position, but it is always important to choose the right branch of bankruptcy for your situation. The two options are Chapter 7 and Chapter 13, and here are three questions a lawyer will ask you to help determine which branch you should use.

How Much Money Do You Earn?

The amount of money you earn can disqualify you from using Chapter 7 bankruptcy, and this is why bankruptcy lawyers always ask this question. To qualify for Chapter 7, the lawyer will compare your income to the average in your state. As long as you earn less than this amount, you could use Chapter 7. If not, you may qualify for Chapter 13. If you meet the income qualifications for Chapter 7, the lawyer will still want to ask you other questions, because there is a chance that using Chapter 13 would be the better option.

Are You Behind on Your Mortgage or Car?

Bankruptcy lawyers also ask questions about mortgage payments and car payments. If you are not behind on either of these things, using Chapter 7 might be the best option. If you are behind on them and are facing foreclosure or repossession, choosing Chapter 13 is the best option. With Chapter 13, you can stop your lenders from taking away your home or car, and this is not something you can typically do in a Chapter 7 case.

Do You Owe Money for Back Taxes, Child Support, or Student Loans?

There is a chance that you can find some financial relief for student loan payments and back taxes through Chapter 7; however, finding relief from these types of debts is much easier through Chapter 13. If you do not owe these types of debts and qualify for Chapter 7, your lawyer is likely going to recommend using Chapter 7.

Chapter 13 tends to be the better option for people who are behind on debts like the ones listed above, because Chapter 13 gives you a chance to repay the debts over time. You do not have this opportunity with Chapter 7 bankruptcy.

Struggling to pay debts can make life overwhelming and stressful. If you are ready to seek help for your financial problems, contact a bankruptcy law firm today to talk to a lawyer, such as at Haven Law Group, P.C.