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What You Need to Know About Your Bankruptcy

Once you’ve decided that bankruptcy is the best option for you and your family, you will have to determine what type of bankruptcy fits your needs. There are significant differences between Chapter 7 and Chapter 13 bankruptcies and not everyone qualifies for both. There are also different advantages and disadvantages to filing as an individual or filing jointly. These are difficult decisions that deserve careful deliberation.

The first step is to determine what type of bankruptcy you are eligible for. Different types of bankruptcies have unique requirements for eligibility. To qualify for Chapter 7 bankruptcy, you must take a means test. The average monthly income you took in during the preceding six months will be compared against similar households in California. If your income is below the state median, you will qualify. If it is above the median, you can still qualify if your disposable income is low enough.

In a Chapter 13 bankruptcy, you will have to propose a repayment plan to clear up some or all of your debts over the next few years. Therefore, you will have to prove that you can afford your planned monthly payments. You will also have to show that you do not have too much secured and unsecured debts.

If you do not qualify for Chapter 7 bankruptcy, Chapter 13 may be your only option. Even if you do qualify for Chapter 7, Chapter 13 may still be your best option if you own a lot of assets and do not want to risk losing them. Chapter 13 allows you to keep your property as you pay back your debts.

After choosing between Chapter 7 and Chapter 13 bankruptcy, you will have to decide how you want to file. An individual bankruptcy is in your best interest if only one spouse has debt or if one spouse has nonexempt separate property that could be taken away during bankruptcy. Otherwise, it may be advisable to file jointly to clear up jointly held debts.

It would be in your best interest to make decisions regarding bankruptcy after talking to an experienced Orange County bankruptcy lawyer. There are many different options and plenty of opportunities to make a costly mistake. If you have questions about Chapter 7 and Chapter 13 bankruptcies, do not hesitate to seek advice from a knowledgeable Orange County bankruptcy attorney.