Many people who could benefit from bankruptcy have postponed doing so because they are not sure if it is a wise choice or if they qualify. They may wonder if they have too much or not enough debt to make the deposit worth it. A relatively small amount of debt could lead to bankruptcy if you don't have the income to cover minimum payments, and having a healthy income doesn't mean you can't get into debt. No matter how much money you're dealing with, if your bills have become unmanageable, it may be a good idea to start researching bankruptcy.
When we meet, we'll discuss the basics of your situation, then do the means test to help us decide which chapter of bankruptcy might be right for you. This calculation looks at your income, living expenses, debts and assets to arrive at your disposable income. If you don't have enough disposable income to pay off your debt, you pass the test and qualify for a Chapter 7. This type of bankruptcy frees most types of debt, especially unsecured debt, and there is no limit on the amount that can be unloaded. You can only file a Chapter 7 once every eight years, so before you file, you'll want to make sure it's the optimal time for your situation. If you are drowning in your debt, even if it isn't much, a Chapter 7 could give you the fresh start you need.
When people fail the means test, they may fear that they will be stuck forever with their debt and its consequences. Fortunately, there are other options, like Chapter 13 bankruptcy. Rather than an immediate discharge from unsecured debt, a Chapter 13 consists of a reduced repayment plan that lasts for three to five years. The plan will be based on your disposable income, and once you make your payments during that time, your remaining debt will be canceled. This could cause you to pay pennies on the dollar of your original debt.
As with a Chapter 7, there is no minimum amount of debt you must have to file a Chapter 13, but maximum limits are set. You cannot have more than $ 360,000 in unsecured debt or $ 1,081,000 in secured debt. Even if you owe more than these amounts, there are several other options available and I will work with you to find the right solution.
Don't go alone
Every decision related to your finances is important, and it can be difficult to decide what to do on your own. If you are unsure of the best way to handle your debt, I can help. You may just need to make some budget adjustments and work with your creditors for more manageable payment plans, or it may be time to reap the many benefits of bankruptcy. Either way, now is the time to take control of your finances and make a fresh start.