Bankruptcy is not a very exciting position to be but there are a lot of choices, questions, problems that have to be addressed almost instantaneously. The first is to identify which Chapter are you looking to file your bankruptcy in. Either Chapter 7 or Chapter 13. Then you have to figure out if you are eligible for Chapter 13 or Chapter 7. If you are eligible, you have to understand the implications of the same and approach the bankruptcy court.<\/p>\n
Tests, Chapters and eligibility<\/strong><\/p>\n There are eligibility factors for each Chapter, and one cannot simply select the Chapter without figuring out the eligibility. Before even getting into eligibility, just outline some key properties of each Chapter for better understanding so that we focus on one Chapter that would suit the most for an individual during bankruptcy. Under the scenario of Chapter 7 bankruptcy, all your non-exempt assets shall be liquidated, and the debts shall be set off by the proceeds of the liquidated assets. The debts shall be prioritized based on secured and unsecured. If the liquidated assets are not able to set-off some debts those shall be written off or released or discharged and no liability carries after the event of bankruptcy.<\/p>\n On the other hand, Chapter 13, is a union of the filer, lenders, bankruptcy trustee and the court, who come together to assess the scenario of the debtor to determine a commonly agreeable plan. This plan usually constitutes of consistent monthly payments for the period of 3-5 years based on the amount of debt. There are clear thresholds mentioned for the amount of limit allowable under each category, secured loans, and unsecured loans. Determine eligibility for Chapter 13 is pretty straight forward. Since the plan is based on future payouts for the period of 3-5 years, the filer might end up paying a good percentage of his debts by the end of the payment plan under Chapter 13. There could be a release of a certain portion of unsecured debt also, depending on the disposable income. Need help to understand more about Chapter 7\/13, log on to Recovery Law Group<\/a>.<\/p>\n Median income and disposable income<\/strong><\/p>\n The median income is the average income a family\/individual makes in California. This used as a standard to determine the eligibility for Chapter 7. The median for a single person is $4,565 per month for the 2018 Financial Year. For a family of four persons, it is $6,097 per month. If your income is above this threshold, which means you do not qualify for the median test, you would have to clear the means test. The means test will let you take an aggregate of last 6 months of income and compare it to the California median. Based on the available disposable income, Chapter 7 or Chapter 13 can be considered.<\/p>\n The disposable income is really important for Chapter 13 as that will be the amount of money to be used to settle the debts. The actual expenses are not allowed but a fixed limit on expenditure has been pre-defined. You can arrive at your disposable income by deducting those fixed limits. For instance, living expenses have been capped to about $650 per individual per month. This includes food, day-to-day expenditures, personal care, apparel, etc. Other expenses can be limited to about $2,500 per month. This would typically include, healthcare costs, car costs\/operating expenses, housing expenses, etc. If in the means test, the disposable income figured out is below $128, the filer would qualify for Chapter 7. If you do not qualify for the median income test and means test, Chapter 13 would be the only alternative.<\/p>\n Disqualified Chapter 7 by a hairline? What are the options?<\/strong><\/p>\n Consulting a qualified and professional lawyer can help in determining the ways to arrive at the lowest possible disposable income in order to gain eligibility to Chapter 7. The number of professional help would be +1 888-297-6203. It has been learned that most people make several errors in calculating their disposable income and file for Chapter 13, ending up with 5 years of payment plans, that can be stressful. The faster way is certainly Chapter 7 that could resolve all your debts in a span of 60-90 days. The following tips could be used to qualify for Chapter 7 if disqualified by a hairline-<\/p>\n Bankruptcy laws are not one of the easiest ones to interpret. Professional help can help you in getting out of the not so pleasant situation quicker and better. Reach out to +1 888-297-6203 for best guidance right now!<\/p>\n\n <\/p> \n
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