If you are facing a mountain of debt and calls from creditors, you may be trying to decide if filing for bankruptcy is right for you. Bankruptcy can offer you a fresh financial start and in some cases a chance to eliminate or resolve your debts. If done at the correct and appropriate time, bankruptcy could help you get back on solid financial ground. Every person’s situation is different, and you will need to determine not only if bankruptcy is right for you, but also what type of bankruptcy to file for in your specific case.
Eligible To File For Bankruptcy
You must first make the determination if you are eligible to file for bankruptcy. There are two types of bankruptcy available to individuals, Chapter 7 and Chapter 13, and both come with their own unique rules regarding eligibility.
In order to be eligible to file for Chapter 7 bankruptcy, you must pass a “means test.” This test examines your debts and income and makes a determination as to whether or not you are able to pay your debts in your current financial situation. This is a complicated calculation, and it is often best to seek the advice of an experienced bankruptcy attorney to see if you would qualify for a Chapter 7 bankruptcy. Chapter 7 bankruptcies are appealing to some debtors as they completely wipe out many of the debts that are owed.
Chapter 13 bankruptcies do not eliminate debt, but rather allow a debtor to restructure their debt through a reorganization plan to repay debtors. A means test is not required to be eligible for Chapter 13 bankruptcy, however, there are certain thresholds of secured and unsecured debt that can not be exceeded in this type of bankruptcy. Additionally, a taxpayer must have filed both their state and federal taxes for the previous 4 years in order to be eligible to file for Chapter 13 bankruptcy.
When To File For Bankruptcy
If you are facing any of the following circumstances, you may be in a position to seriously consider filing for bankruptcy.
- You are in danger of losing your home through foreclosure.
- You are using loans to pay off other bills, and simply recycling your debt.
- Your creditors or debt collection agencies are calling you nonstop regarding your debts.
If you are facing overwhelming debts with no exit strategy, you may be in a position to benefit from filing for bankruptcy. Depending on if you file for Chapter 7 or Chapter 13 bankruptcy, your debts may be discharged, or you may be able to develop a repayment plan for the debts you owe.
Let Us Help You Today
Understanding which type of bankruptcy you are eligible to file for, and when the best time to file for bankruptcy can be legally complex and challenging decisions. The Jupiter bankruptcy attorneys at the office of Julianne Frank, Esq. can help you examine your current financial situation and help you determine your next steps. Call our legal team at (561) 220-2528 for a free consultation today.