Do I Qualify to File for Bankruptcy?


Bankruptcy is not a simple matter to deal with. Until one is forced to grapple with this area of the law, it is not unlikely that you have never given it a second thought. After all, not many people spend their spare time dealing with bankruptcy law. So it is not unlikely that you have considerable confusion about the process that you're facing. There are actually probably a lot of questions that you have, but one of the biggest questions (and one of the first that you will have to answer) is simple: How do I know that I even qualify to bankruptcy at all?

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In all honesty, if you are asking this question, you are asking yourself the wrong question. The question is not whether you are able to qualify, but which chapter you will be able to qualify for. So long as it can be proven that you have considerable debt, you will not be turned away from filing for bankruptcy. The qualifying process will, instead, be used to determine which chapter will be best suited to handle your personal case.

Before determining this, however, it is also important that you decide that what you are doing is really going to be the best decision for you. After all, just because you can file for bankruptcy does not necessarily meant that you should. After all, being in debt does not always equate to the need to file for bankruptcy. There are many alternatives that are available that could very well be an every better solution for your situation - it is important that you give each of these the due thought that they deserve.

If, however, after thoroughly examining your situation you determine that you indeed are prepared to file for bankruptcy, the best thing that you can do is to look into the different chapters that are available to you as an individual looking for file for bankruptcy. There are also chapters that are available to businesses who are struggling with debt, but for the purposes of this article we will stick with personal bankruptcy - not business or corporate.

One of the most popular chapters of bankruptcy is that of Chapter 7. This is commonly referred to as a "straight bankruptcy" or a "straight liquidation." By filing this chapter, you will be able to discharge almost all of your debts and will be able to move forward almost immediately into a cleaner financial future. This is done through liquidating your assets and using them to pay off your creditors. Not every assets will be liquidated (there are exemptions that are permitted under state law), but those that are eligible for liquidation will be used. The end result? You're debt free.

It is important to remember that this chapter is not a free-for-all and not everyone who wishes to file will be allowed to. In an effort to separate those that truly need this chapter to get their feet underneath them once more from those who could technically afford to pay off their debts, a means test is required for everyone who wishes to file for Chapter 7. The means test is simple. Essentially, it will compare the average yearly income of you and your family to that of the state's median income for a family of your size. If it is determined that your income is below this average, you will be eligible to file for a Chapter 7. As simple as that. If, however, it is above, you are not without hope - there are ways in which you can show the amount of disposable income that you have compared to the debts in an effort to show whether you reasonable can or cannot pay off the debts that you are currently saddled with.

For those who do not qualify to file for a Chapter 7 bankruptcy, it is almost positive that you will be able to file for a Chapter 13. The requirements for this chapter of bankruptcy are much less stringent. Per federal law, one will be eligible to file for Chapter 12 so long as their debts are under a certain limit. Secured debts must be under $1,081,400 and you must not have more than $360,475 in secured debts.

It is also important to note that the laws regarding bankruptcy qualifications were recently modified in 2005; however, these were minor changes. For the most part, it was determined that those who were previously able to file for Chapter 7 prior to the update in the statute were still able to file for that chapter of the law. If they were unable to file for a Chapter 7, they were almost certainly eligible for file under a Chapter 13 bankruptcy.

Still have questions about bankruptcy qualifications? Talk to an experienced San Antonio bankruptcy lawyer in your area. Bankruptcy law is complex but it does not need to be impossible. To understand your case in more detail and to determine the best course of action, the best thing that you can do it to schedule an appointment so that you talk about your unique situation.


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