Before applying for bankruptcy, individuals should consider all their options. Bankruptcy can be a helpful process to improve your finances. Chapter 7 bankruptcy has certain requirements that must be met before individuals can file for it. Individuals have to undergo credit counseling and attend a debtor education course to prepare. In addition to this, they must pass a means test, which compares their income to the median income in the United States. In order to be eligible to claim their individual bankruptcy, their income has to be below the median income. However, there have been cases where they can be approved even if their income does not fulfill that standard.
Once you have met the eligibility requirements, a petition for bankruptcy must be filled out. In this petition, you will have to claim a list of all your debts, an account of your income, monthly living expenses and a list of assets. Once the paperwork is completed, the automatic stay goes into effect immediately.
What is the automatic stay?
The automatic stay is in place to bar creditors from contacting debtors. Creditors are no longer able to harass debtors for the money that is owed to them. This can be beneficial for debtors since they will not have to face the added stress of creditors contacting them. With this in mind, the automatic stay may even be able to prevent foreclosure. There are certain circumstances that can help these individuals.
Are Chapter 7 and Chapter 13 bankruptcy similar?
For individuals who need to claim bankruptcy, they can have the options of deciding between filing for Chapter 7 or Chapter 13 bankruptcy. With these forms of bankruptcy, individuals are able to get the help they need to focus on and improve their finances. They may be able to prepare themselves for a better financial future that can help them avoid further pitfalls. These bankruptcy proceedings are better fitted for individuals who are eligible to claim bankruptcy, rather than a business that wants to claim bankruptcy.
Before individuals go through either bankruptcy process, individuals must complete the requirements for the claim. After the paperwork is filed for both bankruptcy processes, the automatic stay goes into effect with each one. This bars creditors from contacting debtors. With this in place, debtors do not have to worry about facing harassment from creditors. Instead, they can focus on fixing their finances and improving their situation.
Detzky, Hunter & DeFillippo, LLC is an experienced law firm that has proudly served clients across New Jersey for decades from their convenient locations in Freehold and Somerville. If you need strong legal guidance, contact us today to schedule a consultation. We are lawyers who listen, counselors who care.
