The Bankruptcy Means Test
If you are overwhelmed with debt from credit cards or medical bills, are behind on your mortgage or car payments, or have been sued or garnished, bankruptcy may be a solution to your problems. You may be able to immediately end the daily calls from your creditors, completely eliminate your credit card debt, halt lawsuits and garnishments, stop foreclosure on your home or prevent repossession of your vehicle.
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy gives debtors a fresh start by discharging or wiping out their unsecured debt entirely. Bankruptcy relief under Chapter 7 is still available to honest debtors like yourself, despite what you may have heard. In order to qualify for a Chapter 7 bankruptcy, you must have a household income below the state median income for a family of your size. If your income is greater than the state median, you will be subject to the means test. If the means test shows that you have sufficient income to make payments to your creditors, you may not file Chapter 7 bankruptcy. Chapter 7 is ideal for people with income below the state median who have no assets or those who have assets that can be protected under state exemptions.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is considered to be a reorganization of your finances, where a portion of your debt is repaid over a period of three to five years. The payments a debtor makes are administered by a Trustee and distributed to creditors over that time. At the end of the repayment plan, the debtor receives a discharge for any amounts left over. Chapter 13 is ideal for those with higher incomes who cannot file Chapter 7 bankruptcy and for people who wish to protect assets that would be otherwise unprotected and potentially surrendered in a Chapter 7 bankruptcy.
How Bankruptcy Could Help You
Bankruptcy may offer a solution to your debt problems. Using the protections that bankruptcy offers, you may be able to prevent foreclosure, stop your car from being repossessed and completely eliminate or reduce the amount of your credit card debt, medical bills, personal or payday loans. If you have already been sued, the lawsuit can be stopped in its tracks upon filing the bankruptcy petition. If money is being garnished from your paycheck to satisfy an outstanding judgment, bankruptcy can stop that too. You may even have options for taxes and penalties owed to the Internal Revenue Service. In short, bankruptcy can guide you toward a brighter future without the stress and misery of creditor calls and lawsuits. You owe it to yourself to explore your options. Please call Jacobs & Davis, P.L. to speak to one of our Bankruptcy Attorneys, Christopher J. Jacobs or Tiffany A. Davis, or fill out the online contact form.