When should I consider filing for bankruptcy?

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For those struggling through tough financial times, it can be a stressful period in their life. Individuals face issues such as losing their home and not being able to provide for their families. This is a scary thought since it creates uncertainty about the future. People do not like to be uncertain. If you find yourself in a position where you are struggling financially and unsure of how to fix it, it may be time to speak to a professional attorney to consider bankruptcy. Bankruptcy has a bad stigma surrounding it, but it should be used by individuals to their advantage to prepare themselves for a better financial future. This can help them support themselves and their family to ensure a more stable financial situation.

Am I eligible to file for individual bankruptcy?

If debt has reached the point where it has grown too overwhelming and you are unsure of how to fix your finances, you have the options of filing for Chapter 7 or Chapter 13 bankruptcy. When filing for Chapter 7 bankruptcy, individuals will need to consider requirements that need to be done beforehand. Credit counseling by a United States approved agency is required during the 6 months prior to filing and a debtor education course needs to be taken. With these prerequisites, an individual can be better prepared for a more stable financial future.

To be considered eligible for bankruptcy, individuals will have to pass a means test. This test compares their income with the median income in the country. If their income is above the median income, they may not be eligible to claim bankruptcy. If it is below, they may be eligible to file for bankruptcy. Although it has happened before where those with incomes above the median income have been deemed eligible to file, it is less likely.

Before filing for Chapter 13 bankruptcy, you need to receive credit counseling within 180 days before filing. If a previous petition was dismissed within 180 days, you cannot file again. You can still file for bankruptcy if you are self-employed or operate an unincorporated business. However, you are only eligible if your secured debts and unsecured debts are less than the capped amount. During these processes, the automatic stay will go into effect. This can also prevent foreclosure on your home if that has become a reality.

If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options.