Declaring bankruptcy has numerous benefits, including protection from creditors and financial institutions. More so, a successful application gives you time to organize and pay off what you owe at a reasonable rate and timeline. However, success is only possible if you complete specific requirements. Therefore, if you're planning to submit a chapter 13 bankruptcy application, contact a legal advisor to know your obligations. They will ask you to take the following essential measures to ensure success.
When filing bankruptcy, you can choose Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. However, this article will focus on Chapter 7 bankruptcy, also known as liquidation or straight bankruptcy.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is popularly known as liquidation bankruptcy because it eliminates all your unsecured debts. These debts can include medical bills, credit card debt, and personal loans.
Most people prefer liquidation bankruptcy because it is quick and straightforward.
Anyone filing for bankruptcy relief will want to have the highest odds of success possible. Fortunately, petitioning for bankruptcy is very process-oriented. If you file for the correct form of bankruptcy, send appropriate paperwork, and prove you qualify, the odds should be in your favor. Here is how bankruptcy lawyers handle the process.
Qualification
The biggest possible problem in most bankruptcy cases is people who don't qualify for a particular type of relief asking for it anyhow.
Chapter 7 bankruptcy petitioners are required to pass a means test showing they don't have enough money to cover their bills. However, if you have certain debts in sufficient amounts, you may be exempt from having to take this test. Here are two debts that may let you bypass the chapter 7 means test.
Tax Debt
To understand how tax debt can provide an exemption to the means test, it's important to learn the difference between consumer and non-consumer debt.
To maximize the benefits of filing for bankruptcy, sometimes you have to time your filing just right. If you're facing foreclosure of your home, you may be wondering whether you should declare bankruptcy before or after the bank has taken the home. It depends on a number of factors, but here are two questions that may help you decide what to do.
Are You Trying to Keep the Home?
Whether you should file bankruptcy before or after the foreclosure process has started depends on your ultimate goal for the home.
