How Do I Know If Bankruptcy Is Right For Me?
Anyone who is struggling with debt may be considering the possibility of bankruptcy and might be wondering if bankruptcy is the best option for them. The decision of whether or not to file for consumer bankruptcy is one you should make with assistance from a St. Petersburg bankruptcy attorney who has experience handling cases that are similar to your own. In the meantime, our firm wants to provide you with some information to help you determine whether bankruptcy could be a good option. The following questions are designed to help you understand the circumstances in which bankruptcy can be beneficial to a debtor. Consider some of the following inquiries and how they might apply to your situation.
Do You Understand the Different Types of Bankruptcy?
Before you determine whether bankruptcy is right for you, do you understand the different types of bankruptcy that exist and how they work? Generally speaking, under the U.S. Bankruptcy Code, consumers can be eligible to file for two types of bankruptcy: a Chapter 7 liquidation bankruptcy or a Chapter 13 reorganization bankruptcy. In a Chapter 7 liquidation bankruptcy, all non-exempt assets are liquidated, and the consumer receives a discharge at the end of the case. In a Chapter 13 reorganization bankruptcy, the debtor develops a repayment plan that lasts three to five years, during which time the debtor reorganizes debts and catches up with creditors.
Debtors cannot choose between the two types of bankruptcy in most cases, and usually a debtor who is eligible for Chapter 7 will not be eligible for Chapter 13 and vice versa.
Will You Be Eligible for the Type of Bankruptcy You Want?
Next, if you do think bankruptcy is right for you, will you be eligible for the type of bankruptcy you want to file for? In order to be eligible for Chapter 7 bankruptcy, you will usually need to pass the “means test,” which is a formula that shows your resources are limited enough that liquidation bankruptcy is appropriate for you. To be eligible for Chapter 13 bankruptcy, you must be a “wage earner” and able to prove that you will likely be able to make monthly payments on a repayment plan over a number of years. In addition, to be eligible for Chapter 13 bankruptcy, you will need to show that your debts are below a specific amount. Otherwise, you can still file for reorganization bankruptcy, but you may need to file for a more complex Chapter 11 reorganization bankruptcy.
Can Your Debts Be Discharged?
Can your debts be discharged? There is not much point in filing for consumer bankruptcy if your debts are not dischargeable. Common types of dischargeable debt include credit card debt, medical debt, mortgage debt, and personal loan debt. In some cases, you may be able to have your student loan debt discharged, but the process is more complicated.
Contact a St. Petersburg Consumer Bankruptcy Lawyer Today
If you are considering the possibility of filing for consumer bankruptcy but you are not yet certain that bankruptcy is the right choice for you, it is important to discuss your circumstances with a lawyer who can help you. The experienced St. Petersburg bankruptcy lawyers at the Law Offices of Stephen Barszcz can assist you.