What options do I have for individual bankruptcy?

What options do I have for individual bankruptcy?

Bankruptcy can be a scary concept for some people, but it can be very useful in times of financial need. People should not stray away from bankruptcy due to the bad stigma surrounding it. Bankruptcy proceedings can help individuals get back on their feet if they need help financially. As an individual that needs to claim bankruptcy, you may go through one of two bankruptcy processes. These processes are Chapter 7 and Chapter 13 bankruptcy. With these two options, you have the opportunity to get your finances in order to improve your situation and hopefully build a better future.

Chapter 7 bankruptcy

To be eligible for Chapter 7 bankruptcy, individuals need to go through credit counseling by a United State approved agency and attend a debtor education course to better their understanding of their finances. They must pass a means test as well. This will compare their income to the median income in the country to see where they stand. They can be eligible for bankruptcy if their income is below the median income in the United States. If it is above the median income, you may not be eligible. However, exceptions have been made before so it is not impossible to get approved in this situation.

Individuals will have to complete a petition for bankruptcy to begin the bankruptcy process. In the petition, you will have to claim a list of all debts, an account of your income, your monthly living expenses and a list of all assets, including real estate and personal possessions. When the paperwork is done and processed, the automatic stay will go into effect to bar any creditors from contacting you about your debts. This can help to alleviate any pressure you are facing. Since they are unable to contact you about money you owe, it may help to rid stress that you have been dealing with due to harassment.

Chapter 13 bankruptcy

The process for filing for Chapter 13 bankruptcy is similar to Chapter 7 bankruptcy proceedings. There are certain eligibility requirements that may vary though. You need to receive credit counseling within 180 days before filing for bankruptcy. If you tried to file another petition and it was dismissed within the 180 days, you cannot file again for this process. Once you file for bankruptcy, you should include documents such as 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. An automatic stay will go into effect for this process just as it does for Chapter 7 bankruptcy.  

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.