When money is tight, it can bring stressful times with it. Individuals may become concerned about the future and how they will be able to support their families. This can lead to overwhelming emotional turmoil. Instead of accepting the beginning of the end, individuals can take charge and explore their bankruptcy options. Bankruptcy can prove to be a beneficial process for individuals that need to fix their financial situation. Through bankruptcy proceedings, individuals may be able to come up with a new plan to structure their debt. They may also be able to stop foreclosure on their home and restrict any access from creditors. Through these useful tools, individuals can focus on their finances without any added stress.
Which processes can help an individual?
There are two processes that an individual can use to claim bankruptcy, including Chapter 7 and Chapter 13 bankruptcy proceedings. For each process, you are able to work toward a goal to improve your financial situation. You may be able to avoid life-changing debt that could potentially haunt you for a long time.
What is Chapter 7 bankruptcy like?
Chapter 7 bankruptcy requires people to receive credit counseling by a United States approved agency within six months prior to filing. They must also take a debtor education course to complete the prerequisites. These eligibility requirements can help prepare individuals with better planning techniques and money managing habits. The means test is the next step in the process. This test is when the individual filing for bankruptcy compares their income to the median income in the country. If the income is below the median income, you may be eligible to file for bankruptcy. However, if it is over the median income, you may not be eligible. Although it has happened before where those with incomes above the median income have been deemed eligible to file, it is less likely. Once the paperwork for Chapter 7 bankruptcy is filed completely, an automatic stay goes into effect, meaning that you will not get any calls from your creditors demanding money to pay off your debts.
How does Chapter 13 bankruptcy proceed?
Chapter 13 bankruptcy can help you develop a repayment plan if you have a regular income. When compared to Chapter 7 bankruptcy, Chapter 13 can have a few more advantages. Most people are able to save their home and reschedule debts by extending them due to the repayment plan. You will need to receive credit counseling within 180 days before filing. If another petition was dismissed within the 180 days, you cannot file. Once you file for bankruptcy, you should file documents that include 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. The automatic stay will go into effect when all the paperwork is filed.
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.