Financial struggles can affect all aspects of our life. It may cause tension at home with the family. It can impede upon your plans to send your children to college or set up accounts for their future. When you are struggling with your finances, it may be time to consider bankruptcy. Chapter 7 bankruptcy is a process that individuals can use to help their financial situation. This is not a bankruptcy process for businesses.
Before applying, Chapter 7 bankruptcy has certain requirements that must be met. Individuals have to go through credit counseling and attend a debtor education course to prepare for the process. They must also pass a means test, which will compare their income to the median income in the United States. To be considered eligible for individual bankruptcy, their income has to be below the median income. However, there have been cases where they can be approved even if their income is above the median income. It may be rare, but an attorney can help you during this process.
A petition for bankruptcy should be filled out after completing the prerequisites. In this petition, you will have to claim a list of all your debts, an account of your income, monthly living expenses and a list of assets. Once the paperwork is completed, the automatic stay goes into effect immediately.
Are Chapter 7 and Chapter 13 bankruptcy similar?
Individuals that may need to file for bankruptcy have the options of filing for Chapter 7 or Chapter 13 bankruptcy. These processes are used by individuals struggling through tough financial times. They may be able to prepare themselves for a better financial future by going through the bankruptcy process. These bankruptcy proceedings are better fitted for individuals who are eligible to claim bankruptcy, rather than a business that wants to claim bankruptcy.
After the paperwork is filed for both bankruptcy processes, the automatic stay will go into effect for each process. This bars creditors from contacting debtors. With this in place, debtors do not have to worry about facing harassment from creditors. Instead, they can focus on fixing their finances and improving their situation.
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 20 years. If you are in need of experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.