Planning To File For Bankruptcy? Do These 2 Things First
The bankruptcy filing process requires a lot of planning, with certain actions that you take impacting the case. If you want to have a good chance at having your bankruptcy filing approved, you'll need to do these two things.
Take a Means Test
There are laws in place that are designed to prevent people from using bankruptcy if they do not need it. This is done through means testing, which compares how much you make to other people that live in your state. Information for means testing is collected by the federal government, and you are even able to look at the income requirements online before you take the means test.
The income amounts provided are not meant to deter you from filing for bankruptcy, but it gives you a good idea if you would even qualify. In general, households with income that is below their state's median income should be able to qualify for Chapter 7 bankruptcy. For individuals and families that file for Chapter 13 bankruptcy, the comparison to the state's median income determines several factors. This includes how much time you have to repay debts, and how big your monthly payment will be.
Receive Approved Credit Counseling
Part of the bankruptcy process also requires that you receive credit counseling by an agency that has been approved by the government. This step must be done before you file, and you'll receive a completion certificate that needs to be filed with your bankruptcy paperwork.
The good things about credit counseling are that it could be done in a variety of ways, so you can pick one that works best for you. This includes in person, online, or even phone sessions. You'll discuss the debts that you have with a counselor, and talk about your income as well.
Your credit counselor may recommend an alternative method to bankruptcy if they see it as a viable solution. You will not be required to execute any recommendation they give you, but taking these steps will cause the courts to look favorably on you and approve a bankruptcy if it is still necessary.
Credit counseling may require a fee, but it is possible that it will be adjusted to your financial situation or even performed for free.
These are just a couple things that must be done before you file for bankruptcy. Ask a bankruptcy law office like Cowan & Brady Law Offices Of for more recommendations that will help get your bankruptcy filing approved by the court.