If individuals are looking to fix their financial situation, they can look to bankruptcy to help them during this time. As an individual, they may wish to go through Chapter 7 or Chapter 13 bankruptcy. Chapter 7 is best known for being the process that requires liquidation. This can prove to be beneficial for some individuals as it will allow them to have the values of their assets assessed and used to pay back their debts. Chapter 13 bankruptcy is more known for its repayment plan. During this process, individuals can develop a repayment plan with their attorney to satisfy creditors.
In order to apply for Chapter 7 bankruptcy, you must make sure you are eligible for this process. Before applying, individuals should make sure that they have considered all their options. they can do this by receiving help from a bankruptcy attorney. These attorneys are highly knowledgable about these processes and can help you get through them smoothly. At this time, you will need to ensure that you have met the requirements that are needed before filing for bankruptcy. Chapter 7 bankruptcy has certain requirements that people must complete before they are able to file for it. Individuals have to go through credit counseling and attend a debtor education course to prepare for this process. In addition to these requirements, they must pass a means test. This test is used to compare their income to the median income in the United States. In order to be eligible to claim their individual bankruptcy, their income has to be below the median income. However, there have been cases where people can be approved even if their income does not meet that requirement.
How does the process continue?
Once you have met the eligibility requirements that are required for Chapter 7 bankruptcy, a petition for bankruptcy must be filled out. In this petition, you will have to claim a list of all your debts, an account of your income, monthly living expenses and a list of assets. Once the paperwork is completed, the automatic stay goes into effect immediately to bar creditors from contacting debtors during this process. Creditors are no longer able to harass debtors for the money that is owed to them once the automatic stay goes into effect. This can be beneficial for debtors since they will not have to face the added stress of creditors contacting them. With this in mind, the automatic stay may even be able to prevent foreclosure. There are certain circumstances that can help these individuals.
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.