Featured News 2013 Do You Even Qualify for Bankruptcy?

Do You Even Qualify for Bankruptcy?

Not just anyone can petition for bankruptcy. In fact, there are some people who need to explore alternative options to bankruptcy because they may make too much money to file and get all of their debts discharged. If you are planning to file for a Chapter 7 bankruptcy, then you must first take a means test. This is a test that will determine whether or not you are experiencing financial hardship by comparing your income with that of the median average income of the estate.

Essentially, if you make over what the average worker makes in your state, then you cannot qualify for bankruptcy. You will need to prove that you are struggling with legitimate financial hardship. If your income is lower than that of the state's average, then your chances of qualifying for bankruptcy are high. You will be required to take a credit counseling course from an approved credit counseling agency within 180 days of filing.

This also applies to Chapter 13 cases. In order to qualify for a Chapter 13 bankruptcy, you must be an individual and you must have enough income to fund the payment plan that you will use too pay back all of your creditors. You will also need to prove that your unsecured debt load does not exceed $360,475 and your secured debt load must not be more than $1,081,400. The amounts are adjusted from time to time, so you will want to check with your bankruptcy attorney to ensure that these amounts are accurate in the year that you are filing.

If you have debt but don't qualify for bankruptcy, then you may need to explore alternative options. There may be a way to consolidate your debt or take out a second mortgage in order to satisfy some of the debts that are pressing. You can also work with an attorney to stop harassment from creditors especially if the abuse is violating Fair Debt Collection Practices Act protocol.

In addition to this, you may be able to negotiate with your creditors. You may need to negotiate with your creditors and settle debts for less than what you owe. A credit counseling agency also may be able to assist you in your case and may be able to present a workable solution to your case. Sometimes, you can enlist a debt counseling agency to help you organize your debts and create a payment plan similar to what you would receive in a Chapter 13 Bankruptcy. This is often helpful for those that are disorganized and may not be able to make a payment plan on their own.

Shockingly, if you don't qualify for bankruptcy then your best approach may be to take no action at all. If you live simply with little income, then you may be considered a judgment proof by the courts. This means that the court cannot sue you because they have nothing left to take from you. Except in unusual situations, you can't be thrown in jail for not paying your debts. Also, creditors cannot take personal possessions like clothing, household furnishings, Social Security, or food to repay your debts.

The creditors also can't garnish any unemployment benefits or public assistance benefits. If you want more information about bankruptcy alternatives or would like to know whether or not you qualify for bankruptcy, then contact a local bankruptcy attorney to assist you! Don't hesitate to hire a lawyer who can help you with your case today! This bankruptcy directory can help you find the best bankruptcy attorneys in your area so that you can get started!

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