FAQ
What is bankruptcy, and how can it help me?
Bankruptcy is a legal process that allows individuals or businesses to eliminate or restructure their debts under the protection of the federal bankruptcy court. It can provide relief from overwhelming debt, stop creditor harassment, and help you regain financial stability. Depending on your situation, bankruptcy can help discharge certain debts or create a manageable repayment plan.
How do I know if I qualify for bankruptcy?
Eligibility for bankruptcy depends on various factors, including your income, debt levels, and financial circumstances. A means test is often used to determine whether you qualify for Chapter 7 or Chapter 13 bankruptcy. It’s best to consult with a qualified bankruptcy attorney who can evaluate your situation and advise you on the best course of action.
What types of bankruptcy can I file for?
The most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7 allows for the liquidation of non-exempt assets to pay off debts, while Chapter 13 involves creating a repayment plan to pay off debts over three to five years. Businesses may file for Chapter 11 bankruptcy to reorganize their debts while continuing operations.
Will I lose all my assets if I file for bankruptcy?
Not necessarily. Many states have exemptions that allow you to keep certain essential assets, such as your home, car, and personal belongings. The specifics depend on your state laws and the type of bankruptcy you file. An experienced bankruptcy attorney can help you understand what you can keep.