Do I Qualify for Bankruptcy? Reliable Attorneys Can Help
“Do I qualify for bankruptcy?” This is a common question for people facing unmanageable debt. This guide will offer the clarity you need to take action.
Do I Qualify for Bankruptcy?
Although it’s never a fun topic to talk about, you might be in a position where you find yourself asking, “Do I qualify for bankruptcy?” The situation is no better when dealing with a potential bankruptcy, as the uncertainty over how it may affect your financial future. If you are supporting a family, that can also add to the stress of the situation.
The law firm of Bournakis & Mitchell does not want to make light of your situation. Here is some basic information on whether you qualify for bankruptcy code protection. This could clarify an otherwise confusing matter during a stressful time.
Do I Qualify For Chapter 7 Bankruptcy
If you consider filing for bankruptcy, you may wonder whether you qualify for Chapter 7 bankruptcy. If you would like to find out whether or not you qualify for a Chapter 7 bankruptcy, the first step is to contact experienced attorneys in Rome, GA. These qualified individuals can help answer your questions and advise you based on your specific situation.
It would be best to consult with a qualified bankruptcy attorney or professional. They can provide some helpful resources that might give you a better idea of what goes into filing for bankruptcy.
Chapter 7 cases are filed if the individual meets the following criteria:
- The individual must have a regular source of household income sufficient to provide for living expenses and payment of current debts.
- The individual must have sufficient property that you can turn over to the trustee to pay off creditors. If there is not enough property, then it is likely that the individual does not qualify for Chapter 7 protection.
- The individual will repay other debts within three years through current income and additional funds from property that can be liquidated.
- You must have sufficient income available each month to pay court-ordered child support payments or alimony.
- You must pass a test proving that repaying your debts through a Chapter 13 plan would impose an “undue hardship” on you and your dependents.
- Your total unsecured debts must not exceed $394,725.
An experienced bankruptcy attorney can further explain your options and obligations if you file for Chapter 7.
How to Qualify for Bankruptcy
You may be wondering how to qualify for bankruptcy. The decision to file for bankruptcy is never easy, but it’s most difficult when you’re facing severe financial hardship. When you can’t pay your bills, the idea of filing for bankruptcy might be comforting. But the reality is that you have to go through several steps before you qualify for bankruptcy relief.
The first thing to know is that there are two basic types of bankruptcy: liquidation and reorganization. In a liquidation bankruptcy, the bankruptcy court will appoint someone to sell off some or all of your assets to pay back what you owe. In a Chapter 7 liquidation case, your non-exempt assets are sold, and the proceeds are shared with your creditors.
A reorganization bankruptcy is called Chapter 13 and allows you to propose a repayment plan that will allow you to keep specific property or possessions while paying your creditors over time.
To qualify for either type of bankruptcy, you must pass a means test, which requires proving that your income falls below the median income level in your state. Your bankruptcy lawyers will consider all your income, including sources such as child support and alimony payments. The court will also look at any assets that you could use to repay creditors if you don’t qualify for either.
Requirements to File Bankruptcy Chapter 7
The basic requirements to file bankruptcy Chapter 7 are the same as a Chapter 13 bankruptcy. The main difference is how you will pay back your debts. Here is a list of the requirements to file bankruptcy:
- You must be over 18 years old.
- You must have earned income (this means you cannot file for bankruptcy on taxes or child support).
- You must have disposable income (this means that after all of your expenses are deducted, you should have money left over).
- If you own a home, car, or other property, and if you owe on them, then you will be required to turn these assets over to the bankruptcy trustee for liquidation. If you do not own these items free and clear, the inclusion will be in your estate, and there is no point in filing bankruptcy as the trustee can take any asset that is not protected.
- Additionally, you owe less than $307,675 in unsecured debt such as credit cards, medical bills, and personal loans. Moreover, if you owe less than $922,025 in secured debt, such as mortgages or vehicle loans, there is no point in filing bankruptcy as the unsecured creditors cannot get anything from you.
Creditors can collect more money by taking your non-exempt property plus your monthly payments.
How Do I Find Out If I Qualify for Bankruptcy?
To find out if you qualify for bankruptcy, you must pass a series of tests set by Congress. The first test requires that you have little or no non-exempt property that you can use to pay your creditors. You must also pass one of the following “means” tests:
- You cannot pay your current monthly income toward your reasonable expenses.
- Your reasonable current monthly expenses exceed your monthly income.
- The present value of all your property is less than the number of your liabilities.
- Your unreimbursed unreasonable expenses plus your monthly income (if any) exceed 10% of your adjusted gross income (AGI)
- State law determines that you are eligible for Chapter 7 bankruptcy.
Your attorney can explain the bankruptcy code and let you know if you automatically qualify for debt relief.
How to Apply for Bankruptcy
You may have many questions regarding how to file for bankruptcy. The basic steps include the following:
- Consult with a bankruptcy attorney
- Attend an in-person bankruptcy credit counseling session
- File for bankruptcy with the court
- Liquidation or repayment of debts
- Completing a debtor education course
- Debt relief
By developing a solid attorney-client relationship with a reputable bankruptcy lawyer, you will likely feel confident in your decision, knowing that answers are just a phone call away.
What Happens When You File Bankruptcy?
So, what happens when you file for bankruptcy? Bankruptcy ends all collection attempts immediately. After the bankruptcy process is over, you will get a notification from the court stating you filed for bankruptcy and a debt relief order that lists your discharged and unsecured debts.
Among other debt obligations, these could include:
- Business debts
- Car loans
- Credit card bills
- Money owed
- Secured debts
Your creditors will be notified and unable to recover any debts dismissed in your case’s credit report. It would be best if you detailed all of your assets, income, and spending on your bankruptcy application.
Choosing Reputable Attorneys
The first step in filing bankruptcy is selecting reputable bankruptcy lawyers. The law firm of Bournakis & Mitchell, P.C. will examine your circumstances and explain your rights. They will thoroughly analyze all factors before making a recommendation.
Contact the experienced attorneys at Bournakis & Mitchell, P.C. if you consider filing bankruptcy and have questions. The firm provides excellent customer service and looks forward to helping you. Call today to schedule a free consultation.