Bankruptcy is a powerful legal tool that allows people to discharge or minimize debts as well as tax obligations. However, due to its effectiveness, not just everyone is permitted to actually use a bankruptcy filing. There are strict regulations, laws, and guidelines that will bar some people from filing for bankruptcy based on a variety of factors.
Although not everyone is eligible for a total discharge of debts in bankruptcy, almost all clients are eligible to consolidate their debts in a repayment or reorganizational plan, which common in Chapter 13 bankruptcy. The ability to discharge or wipe clean debts without repayment is based on a client’s income and equity in assets. In order to discharge debts in bankruptcy, a debtor must show that they do not have the ability to repay their debts. This is determined by averaging their gross household income and assessing those amounts against income thresholds set out by the Internal Revenue Service (IRS) based on household size. If you are filing for Chapter 7 bankruptcy, this is known as the means test.
If you are wondering if you are eligible to file for bankruptcy of any type, let Bournakis and Mitchell, P.C. and our Northwest Georgia bankruptcy attorneys advise you on whether or not bankruptcy will work for you. We hear this question so often from our potential clients, and we are always happy to assist them with a free initial consultation, during which we can discuss forming a personalized bankruptcy case plan. We have helped clients from all walks of life and financial backgrounds since anyone can find themselves cornered by debts, missing payments, or even lawsuits from creditors. A great many of our clients are facing a pending foreclosure and/or repossession of their collateral, and we have used bankruptcy to provide them relief and protection from their creditors.
Ready to get started? So are we. Contact our firm today.