Many people are currently unaware that filing for bankruptcy is an entirely legal and extremely beneficial process that thousands of people have already taken advantage of. Filing for consumer bankruptcy has many advantages for individuals and families across the nation, including the most obvious: a debt-free future. However, if you are unfamiliar with this area of the law, bankruptcy and other legal options of debt relief may be complex or discomforting even. Before choosing to file for bankruptcy, it is important to understand the qualification process of bankruptcy and how it will directly affect the outcome of your finances.
The means test is a simple method that your bankruptcy attorney can walk you through to determine if you qualify for bankruptcy, and if so, which chapter will best suit your needs. First, the income of the debtor will be compared to the median income of the state in which he or she resides. If the debtor's income falls below the median income in the state, they will most likely be considered eligible to file for Chapter 7 bankruptcy. If their income is above the median income in their state, however, the debtor may file for Chapter 13, in most cases.
It is important that you do not limit your options when filing for bankruptcy, as there are many different alternatives available to individuals struggling with debt. Defined quickly, Chapter 7 bankruptcy is a legal process that allows a debtor to quickly and timely relieve their debt through liquidation. According to law, several possessions are exempt from this type of bankruptcy and will not be liquidated, which vary by state. Chapter 13 bankruptcy, on the other hand, is one that allows a debtor to cautiously restructure his or her debt into affordable monthly payments in order to pay back a debtor over a three to five year period. Several alternatives that are possible for debtors include debt negotiation and debt settlement, among many others.
When your financial future is at stake, you will need to be sure to have a legal team that is ready to mold to fit your needs, rather than use a cookie-cutter approach. Your finances are time-sensitive and should be treated as a delicacy, especially when you are staring down the barrel of foreclosure and threats from creditors. Only an experienced attorney will be able to provide you with the resources and attention that you need to ensure your rights are protected both during the qualification process and during the debt relief process. Understanding the qualification process of bankruptcy can be complex, but having a lawyer with an extensive knowledge of this area of the law will benefit your case in many ways. To learn more about your rights and if you qualify for bankruptcy, contact a bankruptcy attorney today.
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