Before claiming bankruptcy, individuals and other entities should consider which option can best suit their needs. Individuals may wish to file for Chapter 7 or Chapter 13 bankruptcy. These have been proven to aid individuals to replan their finances. Chapter 11 bankruptcy is mostly known for helping businesses fix their financial situation. Once individuals are eligible and file for bankruptcy, the automatic stay goes into effect. With this in place, creditors are barred from contacting you. This can relieve some of the stress that you have experienced due to your financial troubles. This tool has proven to be beneficial so that individuals can focus on creating a repayment plan. They do not have to worry about facing harassment from creditors that they owe money to.
What makes me eligible for individual bankruptcy?
Individuals have to go through credit counseling and attend a debtor education course to be considered eligible for bankruptcy. After that is completed, they must pass a means test, which compares their income to the median income in the United States. Their income should be below the median income in order for them to be eligible for bankruptcy. The process of filing for Chapter 13 bankruptcy is similar to 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.
When filing, you will need to fill out a petition for bankruptcy. You will then have to list all your assets and debts. Full disclosure of your finances should be done in order to prepare you for a repayment plan and a better financial future.
What is a business bankruptcy?
A business bankruptcy is also known as Chapter 11 bankruptcy. This form of bankruptcy is recommended for individuals who own a business that is going through financial troubles. When you are granted Chapter 11 bankruptcy, it will stop the shutdown of your business by any creditors, vendors or banks. Instead of sending all income to those you owe money to, claiming bankruptcy will allow for a slow stream of payments to your creditors, which can allow your business to have a revenue stream.
Before taking any sort of legal action, it is important to discuss your legal matter with an experienced attorney. Contact The Radol Law Firm to discuss any divorce and family law matters you may be faced with.