Generally, you could choose the type of bankruptcy to file, under certain circumstances you might only be eligible for a certain type of bankruptcy filing. Most of the time, debtors choose chapter 7 for filling due to the reason that it is fast, effective, easy to file, and doesn’t require payments over time. Chapter 7 bankruptcy typically takes the least amount of time to complete. Other common types of bankruptcy filing are chapter 12 and chapter 13.

Yes, you can choose the type of bankrupt filling; however, you may not be eligible for it.  Let’s see the criteria of filling for some common bankruptcy types.   

Bankruptcy Chapter 12 

For those of you who are a farmer or a fisherman, you might want to consider chapter 12 filing.  Chapter 12 bankruptcy filing is tailored for family farmers or family fishermen; with regular annual income.  This chapter is more streamlined, less complicated, and less expensive than chapter 11 bankruptcy filling, which is for big corporate reorganization.   

Chapter 12 has allowance for situations in which family farmers or fishermen have income that is seasonal in nature.  For this reason, debtors with seasonal income may consider it to be advantageous to file their bankruptcy under chapter 12.  In addition, Relief under chapter 12 is voluntary, and only the debtor can file a petition under the chapter.   

Bankruptcy Chapter 7 

Besides the farmer and fishermen, the majority of ordinary debtors will select chapter 7 as their bankruptcy filing type.  The key factors for the popularity of this bankruptcy type are that it does not require payments over time, is easy to file and is less costly.  However not all people wanting to be debt free by filling bankruptcy are going to be eligible to file under chapter 7.  To be eligible for chapter 7 bankruptcy filing, you must meet the criteria below:  

·         You must pass the median income test:  Your calculated average income should not be more than the median income for your state. 

·         If you failed the median income test, your second option for chapter 7 filing is to pass a mean test:  Mean test is calculated based on your disposable income.  To get your disposable income, you will then calculate your average monthly income as describe above.  From that amount, you will subtract your allowed expenses (stated in IRS) and monthly payments you will have to make on secured and priority debts.  If your monthly disposable income after subtracting these amounts is less than $100, you will pass the means test, and you will be allowed to file for Chapter 7.   

Bankruptcy  Chapter 13 

You will be forced to file your bankruptcy under chapter 13 if you're not eligible for chapter 7.  Or if you have previously filed for bankruptcy under chapter 7, then you will need to go for chapter 13 for second bankruptcy filing.   

Chapter 13, which has also been known as a wage earner’s plan, is an interest-free repayment plan where a debtor repays at least some of his or her unsecured debts with regular payments over a five year period.   

In chapter 7 filing, debtors have to liquidate their assets in order to pay their creditors (creditors will share the amount from the liquidation); while, the debtor typically can continue to live in his or her home so long as the debtor complies with the terms of the Chapter 13 arrangement.  This is one of the advantages of filing chapter 13 bankruptcy over chapter 7.   

In conclusion 

If bankruptcy is your ultimate option to get out of debt, you will be able to choose the bankruptcy type to be file against, but you may not be eligible for the bankruptcy type of your choice if you don’t meet the required criteria.  The best way to confirm it is to check with a bankruptcy attorney on which type of bankruptcy you are eligible for.