What kinds of bankruptcies can a person file for?
There are many forms of bankruptcy and each one has its advantages that fit certain situations. The goal is to hone in to the one that is right for you and your situation. A quick call to our office to gather some information can help you see if you qualify for a bankruptcy. We will work with your schedule and ours to get you a free consultation with our bankruptcy team. Feel free to browse this site to learn more about the different kinds of bankruptcies or click
Chapter 7, known as liquidation, and a chapter 13, known as an adjustment of debts of an individual with regular income, is the 2 main kinds of bankruptcies. A bankruptcy bonus is called a “stays”. This idea puts a stop to repossessions, foreclosures, evictions, garnishments, attachments, utility shutoffs and debt collection harassment. It gives some breathing room when life seems upside down.
Chapter 7 Bankruptcy
Known as the Liquidation Bankruptcy. A court trustee takes over the assets of the person filing for bankruptcy and cashes them out to make a payment to those you owe money to. There are certain assets of yours that they will stay away from like your house if you need to keep that out of the bankruptcy because you have no where else to go. Just make sure you can make that payment. Another asset you can keep out of the bankruptcy is your retirement like your 401K or if in the military, your TSP.
Let’s say that you are doing a chapter 7 bankruptcy and there are no assets for the trustee to pay your creditors, that is called a no asset case. There is a Protection Act of 2005 that requires the person filing for bankruptcy to take a means test. This test will determine whether the individual consumer debtors qualify for relief under chapter 7. If the income level is in excess of the threshold allowed they might not be able to qualify for the chapter 7. They may have to settle for a chapter 13 bankruptcy.
Chapter 13 Bankruptcy
This is known as an adjustment of debt of an individual with regular income. This is for someone who has an income that is greater than the threshold for a chapter 7 bankruptcy. This is for someone that makes a good amount of money maybe due to their spouse making a good income and that pushes your combined income over the limit of a chapter 7. To know the level of income that pushes you over a chapter 7, it requires talking to one of our awesome teammates since there could be income you receive that is not counted and then other things that might be counted as income.
This is why it is very important to schedule a meeting with one of our highly skilled teammates to see what chapter you qualify for. The most important thing to do is tell the truth about all of your income streams and all of your debts. That way you don’t end up committing perjury in court when you have to take your oath. With a chapter 13 bankruptcy, your debts will all be calculated and a repayment plan will be put together that you will have to pay back a certain percentage of the debt you owe. This is usually over the course of 3 – 5 years.
The amount of the debt that is said that needs to be paid must be paid for the discharge to happen. What does that mean to you? If you run into some hard times and can’t pay the bill you don’t get that discharge. Also, if you come into money during that time, your trustee gets that money to pay down your debt.
Can a Business File Bankruptcy?
Businesses can file for bankruptcy just like an individual or a family. There are rules and regulations that they must follow.
The business could end up having to file for bankruptcy because of bad clients and the clients not paying them. A company could end up having a string of bad clients and then no new clients coming in leading to more debt than it can handle. This all could come from something strange like a medical claim being filed or a lawsuit being filed against the company. When this is all put together, it is like the perfect storm. If the business doesn’t have the money on hand to float on during those times, it could have to file for bankruptcy just to stay in business.
Please contact us at 210-361-8311 for more information regarding a business bankruptcy.