To apply for bankruptcy relief, you do not need to have a certain amount of debt. Whereas the amount of the debt is essential, there are much more crucial aspects to consider when deciding whether or not bankruptcy is already in your best interests.
Factors Which Will Assist You In Deciding Whether Or Not To File For Bankruptcy
One of the most crucial decisions you'll have to undertake in your financial future is whether or not to file for bankruptcy. Note that, aside from either the sorts of debt you have accumulated, when you will apply for bankruptcy is mostly determined by the circumstances.
The following are some of the things to think about while filing for bankruptcy:
Unsecured debts: If your debts are primarily unsecured, you can petition for bankruptcy. The level of debt doesn't matter when filing bankruptcy since there is no minimum debt. Credit card debt, medical costs, cash advance (payday) loans are instances of unsecured debts.
Secured debts: Whether you are overdue on a mortgage or auto payment, bankruptcy might be the best option for you. You'll be able to keep your home and have 3-5 years to make up the missed payments, sometimes at a much lower interest rate.
Employment situation: If you are unemployed as well as having difficulties making the payments, you may be able to file for bankruptcy and have some of the unsecured debts discharged. You could either stay current on the secured debts or use a Chapter 13 bankruptcy to catch up on such payments. Similarly, when you are employed but still unable to meet the debt obligations, required to file for Chapter 7 or Chapter 13 bankruptcy can allow you to keep the assets (house as well as car) while also freeing up cash to pay them off by preventing or minimizing payments on medical bills, credit cards, and other unsecured debts.
Paying bankruptcy legal expenses: To receive a debt discharge, you must pay court costs like the attorney fees, filing fee, as well as education classes. Note that filing bankruptcy will not wipe out any of these expenses. Nevertheless, these expenses are insignificant when compared to the money saved on prospective debt payments, which continue to rise due to interest plus late fees.
When Should You File For Bankruptcy Under Chapter 7 and Chapter 13?
Requirements for filing history: The length of time you must serve is determined by the kind of bankruptcy you choose and the conditions of the earlier dismissal.
Minimum monthly income: To be eligible for Chapter 7 bankruptcy, you must satisfy the Chapter 7 Means Test, which compares your income to other families of similar size in the state.
Other debt criteria that be acceptable: Payday loans, as well as credit card bills, are examples of unsecured obligations that can be dismissed in bankruptcy. Whenever you are "underwater," you could also discharge debts from such a car or residence that you no longer want.
In order to file bankruptcy, debtors don't need to have a certain amount of debt. Whether to declare bankruptcy and whether it is the best option for you largely is based on the unique situation.
Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.