If you are struggling financially and you know you won’t be able to make ends meet, you might be considering filing for bankruptcy. Before filing for bankruptcy, it is important to understand the different types of bankruptcy options available for you and which ones you qualify for. Our Fort Lauderdale bankruptcy attorneys explain what bankruptcy qualifications are needed to apply.
If you need legal guidance with your bankruptcy case, contact LSS Law today to schedule a consultation!
Bankruptcy Options Available for Individuals
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is one of the most common types of bankruptcy filed by individual consumers. This type of bankruptcy provides “liquidation” to individuals, which means that it discharges most of your unsecured debt. That includes credit card debt, medical bills, personal loans, and more. The reason why this type of bankruptcy is so common because it is the quickest and easiest way to get rid of debt.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is another common bankruptcy option for individuals. Chapter 13 bankruptcy can help you keep assets that would otherwise be liquidated in a Chapter 7 case, or if you want to restructure your unsecured debts. With chapter 13 bankruptcy, people can file a plan of reorganization that allows them to consolidate every bill into one monthly payment that is supervised by the court. This process can also stop foreclosures, collection lawsuits, and repossessions. Unlike chapter 7, chapter 13 requires applicants to pay back their debt in three to five years before getting the rest of their debt discharged.
Chapter 11 & Subchapter V
Chapter 11 bankruptcy is another option available for individuals who are facing even the most complex debt problems. With Chapter 11 bankruptcy, individual debtors can modify secured debts with fewer restrictions than are typically found in Chapter 7 and Chapter 13 bankruptcy.
Subchapter V, under Chapter 11 bankruptcy helps individuals who are also small business owners with their debt. Individuals who used your primary residence as security for a loan to fund their small business can modify their debt through Subchapter V of Chapter 11.
Do I Qualify For Chapter 7 Bankruptcy?
To qualify for Chapter 7 bankruptcy, the debtor needs to take a bankruptcy “means test” to determine if they are eligible for chapter 7 bankruptcy. The means test is a formula designed to determine whether your income is close to the median income in your state. The means test deducts your specific monthly expenses from your “current monthly income” to determine your monthly disposable income. The higher your disposable income is, the less likely you will qualify for chapter 7 bankruptcy. If they determine that you have a reasonable amount of expenses with little disposable income, you may qualify for chapter 7 bankruptcy. There isn’t a minimum debt requirement to apply for chapter 7 bankruptcy.
Do I Qualify For Chapter 13 Bankruptcy?
Unlike chapter 7, chapter 13 bankruptcy applicants need to demonstrate to the bankruptcy court that they have enough income to qualify. Since chapter 13 applicants are still required to make debt payments, they needed to show that they have enough income to meet repayment obligations for both secured and unsecured debts. Unsecured debts are liabilities that can go through liquidation. Secured debts are debts with collateral that can be seized when debtors don’t make payments, such as car loans or mortgage.
You can use the income from any of the following sources for your Chapter 13 repayment plan:
- Wages & salary
- Income from self-employment
- Wages from seasonal work
- Sales commission
- Pension payments
- Social Security benefits
- Disability or worker’s comp
- Unemployment benefits
- Public benefits
- And more
Do I Qualify for Chapter 11 or Subchapter V?
Y ou may be ineligible to file a Chapter 7 bankruptcy if you have too much disposable income after paying your necessary expenses and you are unable to pass the means test. If you have borrowed a large amount of money, the Chapter 13 debt limits may not be sufficient. However, you would still be eligible to apply for Chapter 11 bankruptcy. If you have consumer and commercial debts, Subchapter V under Chapter 11 can help you modify your debts.
Call Our Fort Lauderdale Bankruptcy Attorneys Today: (954) 932-5377
If you’re struggling to make payments and you’re drowning in debt, there are debt relief options available to help you get a fresh start. Our team at LSS Law is dedicated to helping people throughout Fort Lauderdale get financial relief. If you aren’t sure which bankruptcy you qualify for or which one is best for you, our team can analyze your case and help you determine which type of bankruptcy is best for you. Let our team of skilled, knowledgeable, and experienced bankruptcy lawyers help you.
Contact our Fort Lauderdale bankruptcy lawyers today at (954) 932-5377 to schedule a case review!