Many people believe that they know quite a bit about bankruptcy and some are right. However, many are surprised to learn not only the three most frequently asked questions about bankruptcy, but their answers. Read on to learn more and then reach out to The Law Offices of Paul Y. Lee at 951-755-1000 if you want a free bankruptcy consultation.
- Are there alternatives to bankruptcy?
- Do I qualify for Chapter 7 or Chapter 13? Or do I qualify for both?
- Does bankruptcy get rid of all debt and collection issues?
Yes. In fact, when you work with The Law Offices of Paul Y. Lee you can count on us going over all your non-bankruptcy options as well. For example, if your main concern is your home then a mortgage modification may be possible. If you are concerned about unsecured debt then you may benefit from debt consolidation. When you work with a bankruptcy attorney, we will go over every option to ensure that we are moving forward on the right path, whether Chapter 7 or 13, or a non-bankruptcy option.
It is common for a debtor to want to file Chapter 7 because it is generally faster and it has more discharge power. That said, there are certain means testing that must be met which means that only people the courts deem “deserving” are eligible to file Chapter 7. This means testing is only applicable if the person filing has income of more than the state median. If their income is less than this median then the person qualifies.
In the event the mean tests applies then a calculation will be done with the disposable income of the debtor. If their disposable income is more than a specific amount then they will not be eligible for Chapter 7 and must instead use Chapter 13. If the person in question has received a Chapter 7 discharge in the last eight years then they will also not qualify for Chapter 7.
The type of bankruptcy you file will determine whether or not it gets rid of your debt entirely and whether any property will be left. California law allows for two sets of exemptions but any assets that aren’t protected by Chapter 7 exemptions can be sold by the bankruptcy trustee. As a result, if you have a home, car, or other property that you do not want to lose, then Chapter 13 may be the better option. That said, Chapter 13 results in a longer bankruptcy period.
The right options for any individual will depend on a wide range of factors including their income, the type of debt, and their priorities. What is the same for every debtor is that it is worth talking to a bankruptcy attorney to find out what their options are. You can reach The Law Offices of Paul Y. Lee at 951-755-1000 for a free legal consultation today. We can go over your specific situation and let you know what your best options are. Call now!
