During tough times with finances, people may try to avoid filing for bankruptcy at all costs. However, bankruptcy can be a great option for some people. The process of filing for bankruptcy is set to help people recover from financial troubles. When there are no other options available for you, consider filing for bankruptcy. It can be a useful way to better prepare for a more successful financial future.
Individuals should consider two options for bankruptcy: Chapter 7 and Chapter 13. With these two options, you could be presented with the opportunity to get your finances in order. Through these options, individuals will be able to prepare a financial plan to help their current situation. When filing for bankruptcy, individuals will have an automatic stay put into effect. The automatic stay bars creditors from harassing debtors. Creditors are not allowed to contact individuals in pursuit of compensation for their debt. This can give individuals the space they need to create a repayment plan. They will not have the added stress of harassment from creditors.
How do I apply for Chapter 7 bankruptcy?
To file for bankruptcy, individuals have to be eligible. Before filing, they have to go through credit counseling and attend a debtor education course to be considered eligible. After that is completed, they must pass a means test, which compares their income to the median income in the United States. To be eligible to claim bankruptcy, their income has to be below the median income. However, exceptions have been made before.
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 of a rise in income or expenditures and interests the debtor has in state or federally-qualified education or tuition accounts.
When the paperwork is filed, the automatic stay will go into effect to give you the space you need from creditors. This can be seen as one of the most beneficial parts of filing for bankruptcy since you will not have to face harassment from creditors any longer.
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.