The Basics Of Filing Personal Bankruptcy
General Information about Ch. 7 and Ch. 13 Bankruptcy
Deciding to file for bankruptcy can be difficult. It can also be a fresh start toward a new
life. The type of bankruptcy that is best for you depends upon your individual situation.
To learn some of the basics about the different types of bankruptcy and how they work, please read on. To discuss filing bankruptcy with a bankruptcy attorney, please fill in the Free, No Obligation Evaluation Form. You will be contacted by a local bankruptcy attorney who will talk with you and help you evaluate the best course of action for your specific situation.
Just taking these first steps will help you feel better, and will help you take control of your financial future. Read more
Qualifying to File Chapter 7 Bankruptcy
Of all the bankruptcy options, Chapter 7 may be the most dramatic. Typical cases take only a few months, and are designed to completely eliminate all of a filer’s debts related to credit cards, medical bills, utility bills and personal loans.
Because Chapter 7 bankruptcy can be so effective and sweeping when clearing out unsecured debts, Congress established a set of requirements that must be met before a person is able to file.
The Bankruptcy Means Test
The bankruptcy means test, as it is known, was part of the new bankruptcy laws of 2005. In order to file Chapter 7, you’ll need to pass the means test.
The good news is, the means test is not an actual exam. It is a measurement of “true need,” and a bankruptcy lawyer can take you through the test and, in short order, let you know if you qualify.
Basically, it works by taking into account your income, your debt and the size of your family, to determine if you truly do need Chapter 7 bankruptcy.
This may sound intimidating, but it’s not designed to be the roadblock it may seem. The means test is in place to prevent people from taking advantage of the system. That’s a testament to the power of Chapter 7 bankruptcy.
How the bankruptcy means test works
While the specifics of the means test vary from state-to-state, the workings are the same.
Generally speaking, if you earn less than the median annual income in your state, you should qualify for Chapter 7 bankruptcy.
The median income is the center-line of all annual incomes in the state. It is unique to each state, and includes different income levels based on the size of your family. For example, for means test purposes, the median income for a family of four is typically higher than that for a family of two.
Also, the median income for the means test changes every year in every state.
This may sound like a high bar, but more people may qualify than you think. In most states, the median income for 2009 was between $40,000 and 50,000 for a single earner. For a four-person family, the median income was above $70,000 for many states in 2009.
To find out if you qualify for Chapter 7 bankruptcy, and to learn more about how filing for bankruptcy can impact your debt, speak with a local bankruptcy lawyer.
Could Chapter 13 Bankruptcy Save Your Home From Foreclosure?
You May Be Able To File Bankruptcy And Keep Your Home
Times are tough. If you’ve fallen behind on your mortgage payments, you’re certainly not alone in your struggle. In fact, a foreclosure occurs every 13 seconds in the United States, according to The Center for Responsible Lending. But just because you may be facing bankruptcy, it doesn’t necessarily mean that you must lose your home to foreclosure. If you act quickly, you’ll likely have debt-relief options that could help protect your home. One of those debt-relief options may be filing Chapter 13 Bankruptcy.
How Does Bankruptcy Stop Foreclosure?
When a person files for bankruptcy, the automatic stay typically goes into effect right away.
Under the stay, creditors are court-ordered to stop all collection efforts, which include:
• foreclosure
• repossession
• some lawsuits
• most wage garnishments
• harassing phone calls & letters
Millions of Americans with money problems, and facing foreclosure on their home, have sought the protection of the automatic stay, and filed Chapter 13 bankruptcy to save their homes. Read more
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The information contained on this website is intended to be informational only, it is not legal advice. Bankruptcy issues, and questions having to do with filing for bankruptcy, tend to be very individual and can be complex. You should consult with a bankruptcy attorney licensed to practice in your state for advice about your particular situation before making any decisions.
The free, no-obligation evaluation, that is found on FilingBankruptcy.org, can be used to gain access to an attorney in your area. It is important to speak with a local attorney about your specific financial situation, before making any decisions.