06/29/2010
In determining if bankruptcy is for you must first determine what type of bankruptcy best fits your circumstances. There are two types of bankruptcies that individual debtors can file; Chapter 7 or Chapter 13. A chapter 7 bankruptcy best fits people who would like to eliminate all of their debt and do not have enough income to pay any of their creditors. A chapter 13 is best for people who have enough income to pay a portion of their debt owed to their creditors and who would like to keep their home but are behind on their mortgage. In order to qualify for a Chapter 7 bankruptcy you must pass the 2005 Means test which looks at your income and number of dependents and determines if your income is below the average income of your state. If you pass the Means Test, you can file for bankruptcy and eliminate all of your debts that are dischargeable under the law (there are some debts that are not dischargeable such as alimony, child support, or tax liens). It is best to consult with an attorney to see if you qualify before filing for bankruptcy and have the also determine which debts would be dischargeable.
If you file a Chapter 13, a determination of how much of your income is disposable will be made and it will decided how much of your disposable income can be used to pay off a portion of your debts. In a chapter 13 you will list all of your creditors and it will be decided what percentage of each debt you will be responsible for paying for in over the course of a 3 to 5 year period. If you stick to your chapter 13 plan and make the monthly payments towards the percentage on each debt you are required to pay, the rest of the debt will be discharged at the end of the 3 to 5 year period.
Due to the complex nature of bankruptcy cases and the overwhelming stacks of forms that have to be filed in a bankruptcy case, you should contact an attorney to assist you through the process. By hiring attorney, you will have the peace of mind that your bankruptcy petition will be filed properly and that you are guided through the bankruptcy process by an experienced professional.
If you are overwhelmed by your debts and are unable to pay your bills, you should consider filing for bankruptcy. You may have experienced a recent job
