There are numerous types of bankruptcy designed to meet the requirements of various financial circumstances. Individuals can declare their inability to make debt payments through the legal process of personal bankruptcy. Let's examine some of the most important facts about personal bankruptcy to determine if it's a viable option for you.
Only unsecured obligations, such as unsecured loans, back taxes, payday loans, credit cards, and overdrafts, qualify for personal bankruptcy. It cannot assist you in eliminating secured obligations. Moreover, even if you file for bankruptcy, you would still be required to make payments on a variety of other debts, including alimony and child support, student loans, court penalties for offenses you committed, etc.
There are two varieties of personal bankruptcy: chapter 7 bankruptcy and chapter 13 bankruptcy. In Chapter 7 bankruptcy, the court seizes your assets for the purpose of paying off your debts. In chapter 13 bankruptcy, on the other hand, you do not loose your assets. In this procedure, you are provided with a simple repayment plan that allows you to repay your creditors at an affordable monthly rate over a predetermined time period.
The payment plans are devised with your comfort and financial means in mind. Seek the counsel of an experienced bankruptcy attorney in order to determine your best course of action.
A bankruptcy filing requires completion of a credit counseling course with a licensed credit counselor.
If you want to file for chapter 7 bankruptcy, you must pass a means test to demonstrate your eligibility. A means test demonstrates that your annual income is less than the state's median income for your family size.
You must provide the court with proof of your monthly income and expenses for the six-month period preceding your bankruptcy petition. These documents include bank statements, pay stubs, copies of paychecks, rental agreements, etc. In addition to providing a list of your creditors and detailed information regarding the amount of debt you owe, you must also provide information regarding the amount of debt you owe.
You may petition for chapter 13 bankruptcy as frequently and as often as necessary. Despite the fact that you can file for chapter 7 bankruptcy as many times as your financial situation requires, you must wait eight years between consecutive filings.
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