Upon your initial research on consumer bankruptcy, you may have learned that there are two types: Chapter 7 and Chapter 13. After reading the pros and cons of each chapter, you may have one that you prefer over the other in your mind. Well, in this case, please follow along to find out whether you can choose the type of consumer bankruptcy to pursue and how a proficient Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C. can point you in the right direction.
Can I choose which type of consumer bankruptcy to file?
In short, it is not necessarily a matter of choosing to file the consumer bankruptcy type you want, but rather selecting the one that works in your best interests given your unique financial situation. When consulting one of our attorneys, we may advise you to file for one over another. Without further ado, read the following to see whether you are more aligned with a Chapter 7 or Chapter 13 consumer bankruptcy filing:
- You should choose Chapter 7 bankruptcy if:
- You are currently unemployed or otherwise struggling with a steady stream of income.
- You have few assets to protect and far more debts you wish to rid yourself of.
- You require relief from your debts to better your financial standing sooner rather than later.
- You should choose Chapter 13 bankruptcy if:
- You have a stable, significant income and wish to use it to pay back your creditors slowly.
- You have many valuable assets you are unwilling to lose through the bankruptcy process.
- You have several codebtors whom you wish to protect from your personal bankruptcy petition.
What is the means test for a Chapter 7 bankruptcy filing?
Even if you find Chapter 7 bankruptcy to be more appealing, you must ensure that you are eligible before filing for it. That is, you must pass the Chapter 7 means test to demonstrate that your income is low enough to pursue this consumer bankruptcy type. Specifically, your current monthly income must be below the median income for a family of your size in New York State. These rates are as follows as of November 2024:
- For a one-person household: a monthly income of roughly $5,568.
- For a two-person household: a monthly income of roughly $7,208.41.
- For a three-person household: a monthly income of roughly $8,789.
- For a four-person household: a monthly income of roughly $10,882 plus $9,990 per year per additional household member.
It is worth mentioning that even if you fall above this median, you may calculate your total debts and show that this amount is alarmingly substantial compared to your income. The New York State Bankruptcy Court may think more deeply about your potential eligibility after this.
Before entering these proceedings, you should have already hired a talented Rockland County bankruptcy attorney to represent you. So, if you have not done so already, please contact The Law Offices of Allen A. Kolber, Esq., P.C. today.
