If you have been struggling with your finances and debt obligations in recent years, you may find yourself wondering whether the time has come to file for Chapter 7 bankruptcy. While you may be ready to call a bankruptcy lawyer right away to get the process started, you should consider some factors that affect the Chapter 7 bankruptcy process first so you can be sure that you are making the right decision for your circumstances. Get to know a few of these factors so that you can best determine whether or not this is the right choice for you.
Are You Able to Pay Your Debts with or without Accommodations?
The laws around Chapter 7 bankruptcy have changed in recent years, making the qualifications and regulations more stringent and strict. Because of this, before you even get started in the bankruptcy process, you will want to determine whether or not you are capable of paying off your current debts.
Tally all of your debts, including house payments, car payments, student loans, and credit cards. Determine your currently monthly payments for each of these debts, and then your total debt payments.
If you can afford those payments with your finances as they are, then you most certainly will not be able to successfully pursue Chapter 7 bankruptcy. If you need special accommodations to pay off your current debts, such as reduced interest rates or lower monthly payments, Chapter 13 bankruptcy or no bankruptcy filing at all may be better solutions for you.
Do You Pass the Bankruptcy Means Test?
The bankruptcy means test is a newer regulation put into place to make bankruptcy qualifications more stringent. This is a basic test of your financial status and income. The test determines your monthly income (and annual income) and will compare it to the median income in your state (based also on your family size).
If your income exceeds the median income in your state, there is a high probability that you will not qualify for Chapter 7 bankruptcy, and, depending on certain factors, you might not qualify for the somewhat more flexible option of Chapter 13 bankruptcy. It is important to keep in mind that there are some exceptions to the means test depending on the amount of debt you have and other factors that may not necessarily be included in the means test. You and your bankruptcy lawyer may be able to pursue a case even if your bankruptcy means test results are iffy.
Now that you know a few of the factors to consider before filing for Chapter 7 bankruptcy, you can better make your financial decision and move forward with whatever debt relief solution is best for you. Speak with an attorney like Todaro David M Co LPA for more assistance.
After being involved in a serious auto accident with a drunk driver, I struggled heavily with getting the driver's insurance company to open a claim. When the insurance company started pushing back, I knew I needed to do something. I spent a lot of time digging through the laws surrounding auto accident claims so that I knew what my legal rights were. I even talked with an auto accident attorney. I created this site to teach others about what I learned, including my court experience. I hope it helps you to determine how you should proceed with your auto accident case.