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What Are the Options for Individual Bankruptcy?

Bankruptcy can be a useful way for individuals to fix their financial situation. If they are suffering through tough financial times, they may be eligible to file for bankruptcy. This can help them get their finances in order and prepare for a more successful financial future. As an individual needing to claim bankruptcy, you can go through two processes. These processes are Chapter 7 and Chapter 13. These two options give you the opportunity to get your finances in order to improve your situation.

Before filing for Chapter 7 bankruptcy, you must be eligible. Prior to filing, individuals must undergo credit counseling by a United State-approved agency and attend a debtor education course. They must pass a means test as well, which compares their income to the median income in the country. They can be eligible for bankruptcy if their income is below the median income in the United States. A petition for bankruptcy must be completed to start the process. In this petition, you will be asked to claim a list of all debts, an account of your income, your monthly living expenses and a list of all assets, including real estate and personal possessions. When the paperwork is completed, the automatic stay will go into effect to bar any creditors from contacting you. This can help to alleviate any pressure you are facing. Since they are unable to contact you about the money you owe, it may help to alleviate stress.

Is Chapter 13 Bankruptcy Different?

The process for filing for Chapter 13 bankruptcy is similar to that of Chapter 7 bankruptcy. There are eligibility requirements that must be met before being able to file. You need to receive credit counseling within 180 days before filing. If you tried to file another petition and it was dismissed within the 180 days, you cannot file again. Once you file for bankruptcy, you should include documents such as a list of liabilities, assets and property, a statement of financial affairs, a list of executory contracts and unexpired leases, proof of credit counseling and any plan developed to handle the matter, income payments within 60 days prior to filing, monthly net income and any indication in a rise of income or expenditures and interests the debtor has in state or federally-qualified education or tuition accounts. An automatic stay will go into effect for this process too.

Juan C. Velasco, Esq. is a trusted attorney who concentrates on bankruptcy, family law, real estate, and estate matters who has been serving the New Jersey area for over 25 years. If you are in need of experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.