Bankruptcy is one of the many debt relief options that can assist people in dire financial straits to easily surmount their problems. However, there are numerous alternatives to bankruptcy that can also be effective in managing debt problems. A knowledgeable attorney can provide adequate information on all of your legal options and privileges.
If bankruptcy turns out to be your best option, it is crucial that you understand the various rules established by the bankruptcy courts to ensure that your petition is valid and successful.
Individuals who wish to petition for bankruptcy must first complete a credit counseling course. This course must be completed under the supervision of a certified credit counselor. The Bankruptcy Counseling Certificate must be submitted to the court during the bankruptcy filing process for the court to approve your petition.
The court has also mandated the completion of a means test to demonstrate that your annual income is low enough to qualify you for bankruptcy filing. The purpose of the means test is to demonstrate that your annual income does not exceed the state median income for families of your size.
To file for personal bankruptcy, the court requires certain documents that can be used as proof of your current annual income and personal expenses. Some of these required documents include a proof of income for the six months preceding the bankruptcy filing, a copy of your paycheck, a pay stub, bank records, a rental agreement, and any other type of proof of income received within the preceding six months.
Filing for bankruptcy can only be used to eliminate unsecured debts. It cannot assist with secured debts, such as secured loans, court penalties for offenses, alimony and child support, student loans, and tax debts, among others.
Courts of bankruptcy do not automatically seize all of your valuable assets. The court has made several provisions in the bankruptcy law to assist you in retaining some of your assets, such as furniture, clothing, jewelry, household items, tools, insurance, pension funds, inexpensive vehicles, and in certain exceptional circumstances, even your home. The amount of allowance differs considerably from state to state and depends on each individual's circumstances and needs.
Some states offer individuals the option to use federal bankruptcy exemptions in lieu of state exemptions. To make the best decision, it is essential to evaluate and contrast the values of your assets. The only rule is to consistently adhere to one of the options throughout the duration.
The court permits you to petition for bankruptcy as often as your financial circumstances require. The fact that you have applied for it once does not prevent you from filing again in the future.""
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