Bankruptcy

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Bankruptcy. Ugh, the sound of it sounds so depressing. It makes you think of that board game character wearing a barrel with two straps over his shoulder holding it up. Reality is, bankruptcy is a very viable option for people or businesses who can no longer afford to pay their bills. When the credit card bills get too high, or medical bills are piling up, or you simply got in over your head with a home, a car or any debt for that matter, bankruptcy may be a very viable option for you.


CHAPTER 7 BANKRUPTCY
There are several types of bankruptcy, but most clients file either a chapter 7 bankruptcy or a chapter 13 bankruptcy.
A chapter 7 bankruptcy is a complete discharge of all of your debts. You do have to be able to qualify for a chapter 7 bankruptcy based on income, or based on a “means test”, meaning taking all of your deductions and deductible expenses into account. Usually, the debtor (that’s the person who files bankruptcy) only needs to go to the courthouse once for their court hearing (called a 341 Creditors meeting). Then about 30 to 60 days later, the debtor receives a “discharge”, meaning his or her debts have been wiped away. Pretty good result, huh?

CHAPTER 13 BANKRUPTCY
However, if your income exceeds the allowable amount for a chapter 7 bankruptcy, then a debtor wishing to discharge their debts may be faced with a differ t option, called a chapter 13 bankruptcy. In a chapter 13 bankruptcy, the debtor submits a payment plan to the bankruptcy trustee (the representative for the court who will need to approve this plan) in which the debtor files a plan to pay a percentage of their income towards their debts. It is also a possible option for “stripping” a second mortgage on your home or at least reducing it to a percentage of the properties current home value.

WHAT WE NEED TO FILE BANKRUPTCY
To start the bankruptcy filing, we need the following information:

3 PAST YEARS INCOME TAX RETURNS
6 MONTHS BANK STATEMENTS
6 MONTHS PAYCHECK STUBS
COPY OF DRIVERSĀ LICENSE AND SOCIAL SECURITY CARDĀ 

COMPLETION OF PRE-BANKRUPTCY FILING ONLINE COURSE

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