When you are having financial difficulties, it can seem like there is no way out from under your debt. The good news is you do have options. You might be able to rearrange some finances, set up payment plans, and if it makes sense, there are several different kinds of bankruptcy you could file. Bankruptcy is designed to be a tool that helps people clear their debt and start with a clean slate. You should reach out to an experienced bankruptcy attorney to discuss your specific situation and go over whether filing for bankruptcy is a wise choice for you. Moreover, they can fill you in on everything you need to know about bankruptcy chapters.
Deciding what’s best can be difficult, especially if you are unaware of the various bankruptcy chapters available. To determine the best option for you, your attorney will look at your entire financial picture, including your debts, your income, and your assets. You will also want to consider whether you will file an individual or a joint bankruptcy if you are married. Let a bankruptcy attorney help you make this determination and get you back on track financially.
Chapter 7 Bankruptcy discharges most if not all unsecured debts you may have acquired. It typically takes three to four months to come to a finish, but this can vary depending on individual circumstances. You will be able to keep most if not all of your property under this bankruptcy filing. It is meant for people who truly cannot repay their debt. However, if you are considered a high-income earner, you may not be eligible for Chapter 7 Bankruptcy. Eligible people earn an income less than the state’s median and can pass a means test.
Under this bankruptcy chapter, a bankruptcy trustee will have the power to sell your nonexempt property to pay back your creditors. It is their job to recoup as much as they can from you for your creditors. If you own a lot of non-exempt assets, this can mean you lose a lot.
Chapter 13 is one of the bankruptcy chapters that require you to repay your debts, whether in part or in full, through a repayment plan. The payment plan can take anywhere from three to five years and depend on your income. The final result is your unsecured debts being discharged. Your property will not be liquidated under Chapter 13 Bankruptcy. You will need to have enough income to make regular payments in order for the court to approve your filing. There is no income requirement to be eligible (other than demonstrating your ability to make the propsoed monthly Ch. 13 plan payemnts), but your debts must fall under a certain threshold. At the time of writing, unsecured debt must be under $$419,275 and secured debt under $1,257,850.
Filing for Chapter 13 allows you to keep all of your property if you pay back a particular portion of your debts through a repayment plan. You will be able to save your home from foreclosure or car from repossession. Also, you can also reduce the principal balance of your car loan. You may even be able to eliminate your second mortgage if applicable.
Other bankruptcy chapters are available for businesses and other entities, like schools or municipalities. Chapter 9 Bankruptcy is similar to Chapter 13 Bankruptcy in that it allows an entity to reorganize and come up with a payment plan. Furthermore, Chapter 11 focuses on reorganization as well and its usage is common when it comes to businesses and large corporations. Chapter 12 is for farmers and fishermen with more flexible repayment options.
Deciding to file for bankruptcy can be difficult and you may be under the impression that it is a desperate last resort option. But, that is not always true. You will need to figure out what’s right for you. Moreover, you will need to find the right kind of bankruptcy chapter for your needs. An experienced attorney that can guide you through the entire process and make sure you get the desired outcome. Your income and the types of debts and assets you have most often play a significant role in determining which chapter best suits your needs. When considering filing for bankruptcy, you should first contact the Law Offices of Emil Fleysher, P.A. online or call us at 888-886-0020 to get started.