Do I Qualify for Bankruptcy?

Yakima Bankruptcy Lawyer

Most people will file for bankruptcy under Chapter 7 or Chapter 13, depending on their individual circumstances. If you have recently become unemployed or suffered some other type of unexpected financial crisis and have no other means of income, then you may qualify for Chapter 7 bankruptcy. This is determined through the use of the means test, a tool administered by the courts to see how your income compares to other families of the same size and location. If your income is lower than the average median income in your area and you have no other means to pay your bills, then the court may approve you under Chapter 7 rules. If your income is above the median family income in your state, you may have to file for Chapter 13.

Chapter 7 requirements, also called straight bankruptcy, involve the filing of a petition asking the court to discharge your debts. If you want to keep property like a home or a car, Chapter 7 may not be the right choice for you because it does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt.

If you are accepted for Chapter 13, the court will assign a trustee who will compiles a list of all of your non-exempt assets. These non-exempt assets are sold to pay off creditors. The rest of your debt is dismissed by the courts. It leaves you with a clean slate to start fresh without the constant worry of past financial mistakes looming overhead.

If your application for Chapter 7 bankruptcy is rejected due to exceeding the income requirements, then you will be allowed to file for bankruptcy under Chapter 13. Additionally, if you have debt legally unreleased by the courts, personal and/or business assets, then Chapter 13 would be the best plan to follow. In a Chapter 13 bankruptcy, the court will establish a repayment schedule to pay off your debts in an average of three to five years. Chapter 13 is for someone who has a steady means of income and assets available, but is unable to handle the demands and pressures of creditors.

One good feature of Chapter 13 bankruptcy is that it will allow you to keep valuable property such as a home or car if you can make the payments that bankruptcy law requires, property that otherwise would be lost. A Chapter 13 bankruptcy will stop your home from going into foreclosure, even if the foreclosure has been filed. However, this stop is only temporary. You must bring the past-due payments current over a reasonable time or the foreclosure will proceed and you will lose your house. For this reason, you will want to continue making regular mortgage payments as explained by the courts and/or attorney. In most cases, these payments will be at least as much as your regular monthly payments on your mortgage or car loan, with some extra payments to get caught up on the amount you have fallen behind. Repaying your missed mortgage payments is part of the process of recuperating from the bankruptcy.

You should consider filing for Chapter 13 if you:

Own your home and are in danger of losing it because of money problems
Are behind on debt payments, but can catch up if given some time
Have valuable property which is not exempt, but you can afford to pay creditors from your income over time.

You will need to have enough income during your Chapter 13 case to pay for your necessities and to keep up with the required payments as they come due. An Yakima bankruptcy lawyer can provide more specific information as it relates to your particular situation.

Rebuilding Your Financial Security

Filing for bankruptcy is not a simple process. People also have many emotional ties to their belongings that can make the process taxing. Eastman Law can provide you with professional and caring service to help you resolve your financial situation. We offer skilled legal assistance and the understanding that is often needed when addressing debt problems. Attorneys at our firm will discuss all of the options you have for improving your financial condition.

Contact an Yakima bankruptcy attorney for knowledgeable legal counsel and representation if you have too many debts.