Overcoming debt can be one of life's greatest challenges. Many individuals have debts they just can't afford to pay.
If you are tired of fighting the endless battle to pay-off your debt, bankruptcy may be a great solution for you.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy provides debt relief to those who are experiencing a financial hardship. In order to qualify to file under this chapter, you must meet the income eligibility requirement by passing the "means test." If your income is below the applicable "median income" level, then you are eligible to file for Chapter 7 bankruptcy under the first part of the test. The United States Census Bureau publishes the applicable income figures, which are adjusted periodically. The median income amounts can be found on the U.S. Trustee's website.
If your income is above the applicable "median income" level, you may still be eligible to file for Chapter 7 if you can pass the second part of the "means test." The purpose of this part of the means test is to determine whether you lack sufficient disposable income in your budget to repay at least part of your debt through a Chapter 13 repayment plan. This determination is made by comparing your monthly income to your reasonable and necessary living expenses. If you pass this test, you are then eligible to file for Chapter 7 bankruptcy.
Chapter 7 Discharge
A successful Chapter 7 bankruptcy case will result in a discharge of general unsecured debt. In most Chapter 7 bankruptcy cases, the court approves the bankruptcy discharge within about 3-months from the case filing, so long as all of the case requirements are satisfied. Once the court approves the "Order of Discharge," the dischargeable debts are eliminated.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows you to become debt-free by repaying your debt through an installment plan over a fixed period of time (three or five years). Different factors determine the type of Chapter 13 plan that is available to a particular individual. An important goal of any Chapter 13 bankruptcy case is to obtain a payment plan with reasonable terms.
You won't lose your assets in Chapter 13 bankruptcy. Chapter 13 bankruptcy protects assets such as real estate, vehicles, and savings.
Stop the Creditors
A bankruptcy filing will put an end to:
- collection calls
- credit litigation
- foreclosure actions
- car repossessions
- foreclosure lawsuits
- utility shut-off