Chapter 7 Bankruptcy Filing - Considerations
"""The purpose of the bankruptcy law in the United States is to assist those who can no longer pay their debts. It accomplishes this by reducing or discharging outstanding balances. In some instances, creditors may petition the court to compel an individual to file for bankruptcy. It is a legitimate solution for those who are in over their heads financially and who cannot repay their debt within 5 years even with significant changes to their spending habits.
In the United States, there are two categories of bankruptcy available to individuals and consumers. These are chapters 13 and 7 of the bankruptcy code. Chapter 7 can be filed once every eight years, while chapter 13 can be filed once every six years.
Chapter 7 bankruptcy is what most people consider to be ""bankruptcy"" and is the type of bankruptcy in which a significant portion of your debt is discharged. In Chapter 13, a three-year payment plan is established for the repayment of owed debts.
If you are contemplating filing for chapter 7 bankruptcy, you must first have completed a credit counseling program administered by a US Trustee's office, per 2005 legislative changes. You must provide evidence that you completed this requirement within six months of the filing date.
Then, you need to determine if you even qualify. Since 2005, this has been evaluated using a procedure known as the Means Test. If you earn more than the median income for the jurisdiction in which you are filing for bankruptcy, you will be required to take this means test to determine whether you need to file for bankruptcy.
" - https://www.affordablecebu.com/
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"Chapter 7 Bankruptcy Filing - Considerations"
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and updated on 02 June 2023