April 28, 2017
Questions to Consider if Thinking of Filing Bankruptcy
Filing bankruptcy may be a choice that you are forced to make if you are in financial debt, find it virtually impossible to make different kinds of payments and even live a normal life, possibly find it difficult to buy groceries and even make utility payments and pay gas bills. While bankruptcy may be a viable option to starting life anew, it is not exactly risk free – you need to meet with a professional before taking such a major life decision.
Two Different Kinds of Bankruptcy for Individuals
An individual has essentially two recourses for filing bankruptcy: Chapter 7 and Chapter 13. Each has its pros and cons, and the one which will be right for you depends on your personal situation and which one you are actually eligible for.
If you are not clear in your head about these types of filing bankruptcy, then this will give you some idea:
- Chapter 7 enables you to start afresh where unsecured debts are concerned as creditors will not be able to hound you. However, if you have student loans or child support payments or even some taxes to pay, these will not be discharged. There are strict limitations on how much stuff you can own. So if you own significant assets filing bankruptcy under Chapter 7 may not be for you.
- Chapter 13 on the other hand is a safer bet if you have assets as you can have a structured payment plan that will give you time to pay toward your debts over three to five years. Usually you pay a small portion of what you owe and the rest is wiped-out. You do not have to sell off your property or get rid of your assets. Basically this gives you time to pay some debts and you do through a trustee and not to individual creditors. Also you can pay back taxes, child support or alimony through a Chapter 13 Plan.
You do need to find out which one you are eligible for and it is best to contact an experienced bankruptcy attorney to help you make this decision.
What is the Eligibility Criteria for Chapter 7 Bankruptcy?
There is a means test that will evaluate your eligibility for filing Chapter 7 bankruptcy that you should pass.
To qualify for this filing, firstly your median income should be less than the median income in your state, depending on the size of your family. You are, however, allowed certain expenses from your gross income and you may still qualify even if your median income is higher. It is best to consult an attorney to navigate the intricacies of this process to make sure you qualify.
What is the Eligibility Criteria for Chapter 13 Bankruptcy?
Chapter 13 bankruptcy filing criteria is simpler.
- You should have a certain income that will enable you to pay off your debts within the time frame and this should be disposable income.
- You should have a secured debt comprising mortgage and loans within $1,149,525. Your unsecured debts like credit card outstanding, medical bills and the like should be within $383,175.
These are only some basic criteria. There are many other factors that come into play while considering bankruptcy.
What Types of Assets and Liabilities Do You Have?
While bankruptcy may be a solution for debt relief, it is not suitable for everyone and for all kinds of debt. For instance, student loans and child support payments cannot be discharged by filing Chapter 7 bankruptcy. If you do not have sufficient disposable income, then filing bankruptcy under Chapter 13 is not for you either. The property you have, the assets you want to keep and the kinds of debt you want to get discharged are all significant in filing bankruptcy proceedings and you should consult a bankruptcy attorney for the correct advice.
Call Steven M. Fishman for a Free No Obligation Consultation
No matter which type of personal bankruptcy you are considering or if you need more information about a business Chapter 11 bankruptcy, Steven M. Fishman can help you decide which is best for you. So call 727-724-9044 today to schedule a consultation where you can get the answers you need to know if bankruptcy is a viable option for you.
The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and experience. We are a debt relief agency. We help people file for bankruptcy under the United States Bankruptcy Code.