Do I Qualify?
Are you considering bankruptcy but unsure if you will qualify? You may be surprised with what you find out:
Many people assume that the new bankruptcy law that was passed in 2005 makes it impossible for anyone to file for bankruptcy. However, although Congress’ new bankruptcy law has made it slightly more difficult, about 95% of people we meet qualify for Chapter 7 ‘liquidation’ bankruptcy. And the other 5%? They qualify for Chapter 13 ‘reorganization’ bankruptcy. In general, everyone can qualify for either Chapter 7 or Chapter 13 bankruptcy. However, most of us will not file just because we qualify. We all want to avoid filing for bankruptcy – so how do you know if filing for bankruptcy is something you should consider?
On average, we recommend filing for a chapter of bankruptcy to 50% of our clients. The other 50% may not need to file for bankruptcy and instead are put on a debt consolidation plan. We look at each case on an individual basis which is why there is not a general guideline you can follow to determine if filing is the right option. A consultation with one of our attorneys will provide you with the answers you are looking for.
Factors in Qualifying for Bankruptcy
Although we cannot tell you over the internet whether or not you will qualify for Chapter 7 bankruptcy, we can include a few of the factors involved in determining if Chapter 7 or Chapter 13 is your best option:
Chapter 7 bankruptcy is considered the liquidation bankruptcy and is the most common form of bankruptcy filed by individuals. In most instances, your assets will be liquidated as a trade off for a discharge on your debt. You may qualify for Chapter 7 bankruptcy if any of the following apply to your situation:
- If you are overwhelmed by debt and cannot see any viable means of paying it back
- If you have assets to liquidate and are willing to do so (keep in mind, however, that even through Chapter 7 bankruptcy, it is possible to keep your home, your car and other assets in certain situations)
- If you are struggling every month to make ends meet
- If you are being harassed by creditors or if you have succumb to wage garnishment
Chapter 13 bankruptcy, on the other hand, is a reorganization bankruptcy which takes your existing debt, restructures it into a manageable payment plan for a period of time before discharging the debt. You will qualify for Chapter 13 bankruptcy if:
- You are struggling with debt but do not want to liquidate your assets
- You have a steady income
- You can afford to make payments for a period of time
What Next?
If bankruptcy is something you are considering, then it is important to seek experienced legal advice. At Myles A. Schneider & Associates, Ltd., we will assess your situation and determine which the best solution is for you.
Legal Advice 24/7
We represent bankruptcy clients in matters involving Chapter 7 bankruptcy, Chapter 13 bankruptcy, wage garnishment, creditor harassment, foreclosures and debt consolidation. Contact Myles A. Schneider & Associates, Ltd. 24 hours a day, seven days to week at 763-315-1100 to see how we can help you.
