When should I file for bankruptcy?

Tough financial times can lead to a stressful time for individuals. They may be worried about supporting themselves or even supporting their families. When money is tight, people often become worried about the future and unsure of what may happen. If you find yourself in this position, it may be time to speak to a professional bankruptcy attorney. Bankruptcy should not be seen as a bad thing. Instead, individuals should use it to their advantage to prepare themselves for a better financial future. This can help them support themselves and their family to ensure a more stable financial situation.

Am I eligible to claim bankruptcy?

When debt has grown too overwhelming and you are unsure of how to fix your finances, you have the options of filing for Chapter 7 or Chapter 13  bankruptcy. Before filing for Chapter 7 bankruptcy, individuals will need to consider the eligibility requirements. Credit counseling by a United States approved agency is required during the 6 months prior to filing, along with a debtor education course. This can educate individuals on how to improve their situation and avoid issues financially in the future.

A means test will then be done to determine if the individual is able to continue with the process. The means test is when the individual filing for bankruptcy compares their income to the median income in the country. If the income is below the median income, it may make them eligible to file for bankruptcy. However, if it is over the median income, you may not be eligible. Although it has happened before where those with incomes above the median income have been deemed eligible to file, it is less likely.

Before filing for Chapter 13 bankruptcy, you need to receive credit counseling within 180 days before filing. If another petition was dismissed within the 180 days, you cannot file. You can still file for bankruptcy if you are self-employed or operate an unincorporated business. However, you are only eligible if your secured debts and unsecured debts are less than the capped amount. During these processes, the automatic stay will go into effect. This can also prevent foreclosure on your home if that has become a reality.

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.