Things to Consider When Filing Personal Bankruptcy

Liquidation should always be chosen as the last option after unsuccessfully trying other options like selling your assets. Before choosing which type to apply for, it will be prudent to discuss the matter with a liquidation attorney for advice.

For a Chapter 13 bankruptcy in Memphis, you can create a payment plan to pay your creditor over a period of 3-5 years. The amount of time that it takes to pay it off depends on the amount of debt accrued and your income. In order to be eligible for this type of bankruptcy, you need to have regular income that is high enough to cover the debt and your other expenses. Your debt can't exceed $1,149,525 for secured debts and $383,175 for unsecured debts. If you're eligible and determine that this is the best option for you, here are a few things that you should know:

Chapter 7 bankruptcy can be filed by any one, who is a resident of USA and has a business or property in U.S. Chapter 7 bankruptcy can not be filed by any person, who has been granted debt discharge by Chapter 7 within the last 6 years and who has completed a repayment plan under Chapter 13 and whose bankruptcy filing was dismissed for cause within the last 180 days and who tries to hide, transfer or destroy his properties in order to defraud his or her creditors or the court trustee assigned in the chapter 7 case and who is not truthful about his financial condition or business transactions and who defies the orders of bankruptcy court or doesn't answer questions asked to him.

Another viable option through the courts is to reclassify the educational loans and financial aid funds when the person files for Chapter 13 bankruptcy. This allows the individual to pay more of their income to the student loans because the amount of unsecured debt has been reduced.

It is the exception rather than the rule that a person financing a vehicle owes less than or equal to the cars value. Unless you put at least 20% down, chances are you are upside down. Bankruptcy not only can eliminate unsecured debts like credit cards, it can also drastically reduce what you owe on your vehicle.

There are obviously advantages and disadvantages to both types of bankruptcy filings. However, you may not qualify for bankruptcy under Chapter 7 if you earn too much money. Your attorney can explain the differences in detail and help you understand what each option entails for your financial situation.

Due to the new laws, not everyone can file a Chapter 7. Chapter 7 is what many people assume when they think of bankruptcy, an avenue to completely wipe out debt and give you a fresh start. It is not necessarily 100% true that Chapter 7 will wipe out all debt, but it does give the consumer a much lighter burden to bear. The problem is that only people who have a small enough amount of disposable income can file Chapter 7. Disposable income is what is left over to spend after all monthly expenses have been paid. The Internal Revenue Service (IRS) is the organization that gets to decide what things should cost, so just because you pay a certain dollar amount, that does not mean the IRS will allow it. Only individuals who have less than $100 a month in disposable income by IRS standards can file Chapter 7. And beyond that, a Chapter 7 will not stop foreclosure indefinitely. Usually a lender will ask to have a foreclosure stay removed as soon as it is possible to do so.

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