An automatic stay is a tool used in bankruptcy to prevent creditors from contacting debtors. In these situations, it can make it easier for debtors to deal with their finances by avoiding harassment. Through the tool of the automatic stay, it can prevent individuals from the added stress of dealing with creditors who are demanding the money that is owed to them. Individuals can focus on the bankruptcy process without interruption.
When do I apply for Chapter 7 bankruptcy?
Before applying for bankruptcy, individuals have to be eligible. They should go through credit counseling and attend a debtor education course to be considered eligible for filing for Chapter 7 bankruptcy. After they complete these steps, they must pass a means test, which compares their income to the median income in the United States. To be eligible for a bankruptcy claim, their income has to be below the median income. Although this is the standard procedure that is followed, exceptions have been made for those with incomes above the median level.
Once you have completed the prerequisites, a petition for bankruptcy must be filled out. In this petition, you will be required to list certain aspects. You have to claim a list of all your debts, an account of your income, monthly living expenses and a list of assets. When the paperwork is completed, an automatic stay will go into effect immediately.
How is Chapter 13 bankruptcy different?
The process of filing for Chapter 13 bankruptcy is similar to that of Chapter 7 bankruptcy. Before you file, you will need to complete credit counseling 180 days before you file. If you previously filed a petition that was dismissed in the 180 days, you cannot file again. Once you file for bankruptcy, you should include documents that display 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.
Matters related to bankruptcy and estate planning are very significant in one’s life and require the services of an experienced attorney. Our firm proudly serves clients throughout Rockland County and New York State. If you need effective legal guidance, contact Koplen Law today to schedule a consultation.