To file for Chapter 7 bankruptcy, you must meet certain income requirements. If you make too much money or are not behind on any of your payments, you may not qualify for Chapter 7 bankruptcy. The court may view you as having enough money to pay back at least some of your debt. If this is the case, you may qualify for Chapter 13 bankruptcy. Also, your medical bills and other debts can't exceed the allowed Chapter 13 debt limits. More Information. You can learn more about your options by consulting with a bankruptcy attorney or by checking out more on Chapter 7 and Chapter 13 Bankruptcy. Or, start by finding out about the steps involved in bankruptcy once you decide to file. May 27, · This all sounds good, right? You can get forgiveness of all your credit cards and lots of other debt in a Chapter 7 case. But there is one issue. Not everyone will qualify to file a Chapter 7 case. Changes to the bankruptcy law by Congress in makes it more difficult for people to file this kind of bankruptcy.
Related videosBuying a Home After BANKRUPTCY - ** 5 TIPS!! **- EMPTY HOUSE TOUR!!
If you make too much money or are not behind on any of your payments, you may not qualify for Chapter 7 bankruptcy. The court may view you as having enough money to pay back at least some of your debt. If this is the case, you may qualify for Chapter 13 bankruptcy. Chapter 13 bankruptcy is designed for debtors who have enough income that they can pay back at least a portion of their debts.
This is typically done through a repayment plan spanning a period of three to five years. If you have kept up with the payments, your outstanding debts at the end of the repayment period are discharged. Filing for bankruptcy should not be taken lightly.
It is a difficult process that should be used only as a last resort. People turn to bankruptcy when they are going through major life events that significantly reduce their income, increase their expenses, or both. Such events could include getting a divorce, losing a job, or having to pay back expensive medical bills. A bankruptcy discharge stays on your credit history for about 10 years.
However, the older the bankruptcy is, the less of an impact it has on your credit score. Another thing to keep in mind is that while a bankruptcy dissolves you of your obligation to repay your creditors, it may burden others who will then be on the hook for your debts.
For example, a joint account holder or co-signer would then be responsible for your debts. Thus, before you file for bankruptcy you may want to have anything you owe transferred into your name only.
Filing for bankruptcy is not an easy decision. There are many considerations to take into account that can have a lasting impact on your life. Enlisting the help of a professional can be useful if you have any questions or would like further guidance. This portion of the site is for informational purposes only.
The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law. By Stephanie Kurose, J. Chapter 7 is straight bankruptcy. The process lasts about four to six months. Not all debts in a bankruptcy case are dischargeable. Some, like recent income taxes, past-due child support and alimony cannot be discharged and will survive the bankruptcy case.
Some, like student loans, can be discharged under very narrow circumstances. So, what happens to your property in a Chapter 7 case? Every state has an exemption list with types of property and maximum values.
The trustee will sell the nonexempt property and distribute the proceeds to your creditors. This all sounds good, right? You can get forgiveness of all your credit cards and lots of other debt in a Chapter 7 case. But there is one issue. Not everyone will qualify to file a Chapter 7 case. Changes to the bankruptcy law by Congress in makes it more difficult for people to file this kind of bankruptcy.
A Chapter 13 case is a repayment plan that lasts from three to five years. It's also called a wage earner's plan. Your payment amount will be based on the debts you have and your disposable income. That means you could very well pay many thousands of dollars less than you owe and still get a discharge of any remaining debt at the end of your plan. In both cases, you will also be required to go through credit counseling with an approved agency both before and after you file your case.
The counseling sessions before are to determine whether you really need to declare bankruptcy. The counseling after filing is aimed at helping you manage your finances.
Many people are concerned about what will happen to their relationship with their doctors and other medical providers if they discharge medical debt. You may think it will be difficult to visit a trusted doctor. Congress enacted the Emergency Medical Treatment and Active Labor Act in , preventing hospitals from refusing to treat patients who can't pay. But medical providers, including your primary physician, can refuse to treat you after their debt has been discharged in bankruptcy.
In reality, most will not take that drastic action, especially in the case of hospitals. They understand the need for bankruptcy and why you filed the case.
If that happens, it may not be appealing, but you can always find another provider. If you want to pay Dr.