Eligibility Requirements For Filing Bankruptcy
Filing bankruptcy provides many financial benefits, so it is important to know if you are eligible to file. It is also important to know for which chapter you qualify, and what to expect during your case. The short answer is people with consumer debt are allowed to file bankruptcy, and businesses are also eligible. The determination as to what type of case you will be filing involves a complex mathematical computation, but a skilled bankruptcy attorney will do the math for you.
The bankruptcy laws define “who can be a debtor”, and the definition includes:
● An individual, with consumer debt.
● A company that is seeking to liquidate its operations, or looking to reorganize itself.
This is the easy party, because as you can see nearly everyone fits the definition of a “debtor” under the Bankruptcy Code. The chapter you are eligible to file is a different story though, given the changes to the law in 2005. Most people prefer to file a Chapter 7 case, which will liquidate all of your unsecured debt. The less desirable form of bankruptcy is a Chapter 13, which acts like a consolidation of debt. Prior to 2005 debtors made the decision as to which chapter of bankruptcy to file. But today a filer must undergo careful scrutiny of their finances when filing and if there appears to be too much disposable income then the Courts will require a Chapter 13 case be initiated. This calculation is referred to as the means test, and your bankruptcy attorney will walk you through the process and make sure the result of the test is mathematically accurate so you don’t run afoul of the rules on which chapter to file. We have experience performing the means test calculation and know what information to get from you in order to reach the right result.
If you are considering filing bankruptcy and have questions about your eligibility, call a knowledgeable attorney to discuss your options. We can help you understand your choices and make a decision that works for you. Call a Plantation, Florida debt relief attorney today for more information.