For anyone who has heavy debts that you are currently unable to pay off, bankruptcy is likely something that you have already considered. Bankruptcy protection is something that is available to most Americans who are in over their head or just can’t make any traction with payments.
However, it should also be noted that there are requirements for each individual bankruptcy chapter. In today’s post, Groce & DeArmon, P.C. look at five of the most common eligibility requirements for those seeking bankruptcy protection.
This is often the first thing that the court and trustee will look at for someone looking for bankruptcy protection, and it will play a major factor in your eligibility and what chapters you are eligible for. For instance, the first thing a Chapter 7 filer will do is take part in a means test. If your disposable income is too high, you will be ineligible.
2. Previous Debt
Another common requirement for bankruptcy filings is previous debt. While it is possible to file for bankruptcy more than once, your previous debt history will play a role in your eligibility for further bankruptcy protection. For Chapter 7 filers, you will have to come into the proceedings at least eight years out of your previous Chapter 7 discharge and at least six years out of your previous Chapter 13 discharge.
3. Credit Counseling
Another requirement for some bankruptcy filings is credit counseling. The previous and forthcoming requirements have more crossover into each chapter, but this one is more specific to Chapter 7 filings, the most common filing. With this requirement, debtors are required to have gone through credit counseling with a certified entity within 180 days of the filing.
4. Individual Status
Your status will play a big role in which bankruptcy chapter you are eligible for. Some, like Chapter 7, are open for individuals, partnerships, and even businesses. However, some are more specifically for businesses (Chapter 11), municipalities (Chapter 9), or even family farmers and fishermen (Chapter 12).
5. Debt Amount
Lastly, the amount of money you owe will play a role in your eligibility, as well as which chapters you are eligible for. The amount that you owe ties in directly with the amount that you will be able to alleviate via payment plans. So, those with bigger debts will be less likely to qualify for a Chapter 13 filing than a Chapter 7 filing.
Contact Groce & DeArmon, P.C. For Bankruptcy Protection
At Groce & DeArmon, we are committed to providing bankruptcy protection to our clients, specifically through Chapter 7 and 13 filings. Give us a call today at (417) 862-3706 or contact us online for more information.