How Long Will It Take For Me To Be Discharged From Bankruptcy
If this is your first bankruptcy, you are eligible for automatic discharge in 21 months provided:
- Your discharge is unopposed
- You have complied with every one of the required surplus income payments.
If this is your second bankruptcy, then you are eligible for discharge after 30 months provided:
- Your discharge is unopposed
- You have complied with every one of the required surplus income payments.
How To Seek Professional Advice
You don’t have to go it alone when you’re weighing whether to file for Chapter 7 or Chapter 13 bankruptcy and, then, if you decide to proceed. Check out these resources.
- Bankruptcy attorney: You can file for bankruptcy without a lawyer, but you might want to visit with a lawyer if you’re unsure how to move forward.
- : A credit counseling agency might be able to work with you on a debt repayment plan so you can avoid bankruptcy. The U.S. Department of Justice maintains a list of federally approved credit counseling agencies.
- Financial advisor: A financial advisor might be able to guide you through establishing a budget and creating a debt repayment plan.
If You Don’t Pass The Chapter 7 Means Test
If you don’t pass the means test, you’re limited to using Chapter 13 bankruptcy, which requires you to make monthly payments over a three- to five-year period according to a strict budget monitored by the court. Most people who file for bankruptcy prefer Chapter 7, which requires no repayment. However, Chapter 13 bankruptcy is still the best way to handle specific problems, like curing a default on a mortgage and repaying debts that won’t go away in bankruptcy, such as most taxes and support arrearages.
But before you settle on Chapter 13 bankruptcy, be sure to talk to a lawyer. With expert legal advice, you might find that you’re able to pass the means test after all.
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Will I Continue To Be Eligible For Bap If My Income Increases After I Have Been Accepted Into The Program
If your income increases after your acceptance into the Bankruptcy Assistance Program, the Trustee will determine if you have a surplus income .
If you do have a surplus income, then the Bankruptcy Assistance Program will not be available to you any longer.
You will have to make surplus income payments based on your new income to the Bankruptcy estate.
That is also a clause to ensure your discharge from Bankruptcy.
The federal government sets standards to assess if you will be required to make surplus income payments to the bankruptcy estate.
What Happens When You Go Bankrupt
If the adjudicator makes you bankrupt:
- youll receive a copy of the bankruptcy order and may be interviewed about your situation
- your assets can be used to pay your debts
- youll have to follow the bankruptcy restrictions
- your name and details will be published in the Individual Insolvency Register
You can apply to have your address removed from the Individual Insolvency Register if publishing it will put you at risk of violence. This will not affect your bankruptcy.
After 12 months youre usually released from your bankruptcy restrictions and debts. Assets that were part of your estate during the bankruptcy period can still be used to pay your debts.
You might be able to cancel your bankruptcy before youre discharged.
Bankruptcy only applies to individuals. Find out what your options are if your limited company cannot pay its creditors.
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Advantages And Disadvantages Of Bankruptcy
If you’re trying to decide whether you should file for bankruptcy, your credit is probably already damaged. But it’s worth noting that a Chapter 7 filing will stay on your for 10 years, while a Chapter 13 will remain there for seven. Any creditors or lenders you apply to for new debt will see the discharge on your report, which can prevent you from getting any credit.
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In a Nutshell
Chapter 7 bankruptcy is an important debt relief tool for Americans in severe financial distress from losing a job, getting injured, or getting divorced. Upsolve walks you through the steps on how to file for Chapter 7 bankruptcy and get your fresh start in 10 steps.
Written by Attorney Andrea Wimmer.
First, you need to determine whether filing bankruptcy will help you. Bankruptcy is a powerful debt relief tool, but only if it makes sense for your financial situation. Filing any type of bankruptcy provides immediate debt relief through the automatic stay. Thatâs the law that prohibits creditors from contacting you as soon as your bankruptcy case has been filed. It also stops a wage garnishment right away.
Chapter 7 bankruptcy is a very effective tool for erasing credit card debt, medical debts, and most other unsecured debt. Although Chapter 7 is a liquidation bankruptcy, filers are able to keep all their property in more than 90% of all consumer bankruptcy cases in the United States. You can file bankruptcy under Chapter 7 once every 8 years.
The name of your bankruptcy trustee
The date, time, and location of your meeting with your trustee
Make Sure You Are Eligible
For both Chapter 7 and Chapter 13 bankruptcy, you must file a means test that determines your eligibility. The means tests ask you to report your monthly expenses and your monthly debt payments as well as any lawsuits against you. Again, this is why it is smart to hire an attorney to represent you. There are often factors that qualify people for a Chapter 7 bankruptcy when they are above the income requirement. Your attorney knows the technical details on how to properly calculate and complete the means test.
Chapter 7 means test form:
Chapter 13 means test form:
The court will use the means test documents to judge your ability to pay your current debts. If they decide you have the means to pay, you wont be able to continue. If you do meet the criteria, you can continue with the bankruptcy process.
Attempt To Negotiate Better Terms
Lenders holding unsecured debt want most of all to be paid back. They are not beyond renegotiating the interest youre paying on your balances, but you have to ask.
Heres how to prepare to negotiate better debt repayment terms:
- Know your card and/or loan provisions, including the grace period, monthly due date and your balance. Check your credit ahead of time if youre still wielding a decent score indicating youre a good risk, lenders might be more inclined to comply with your requests.
- Do your homework. Are there competing credit cards with better rates? Note them and be prepared to invoke their attractive terms as a bargaining lever.
This is not a guarantee, of course, but if you can properly explain your current financial fix and agree to a repayment schedule make certain its realistic the bank might cut you a provisional break on your interest.
Understand that if you get a reduction but fail to keep up your end of the bargain, those high rates you bargained down are likely to snap back, and then some.
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Approved Credit Counselors And Debtor Educators
The Department of Justices U.S. Trustee Program approves organizations to provide the credit counseling and debtor education required for anyone filing for personal bankrutpcy. Only the counselors and educators that appear on the U.S. Trustee Programs lists can advertise that they are approved to provide the required counseling and debtor education. By law, the U.S. Trustee Program does not operate in Alabama and North Carolina in these states, court officials called Bankruptcy Administrators approve pre-bankruptcy credit counseling organizations and pre-discharge debtor education course providers.
Why Do People File For Bankruptcy
No one’s financial circumstances are exactly the same when it comes to bankruptcy. But many bankruptcy filers head to court for similar reasons. Here are the three most common reasons for bankruptcy filings, according to the American Bankruptcy Institute:
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The Filer Is A Corporation Or Llc
A business can file for bankruptcyand sometimes it makes sense to do so . Chapter 7 bankruptcy won’t wipe out the debt of a corporation or LLC, however. Instead, the trustee will liquidate the company assets and distribute the funds to creditors.
You can find out more by reading Chapter 7 Bankruptcy for LLCs and Corporations.
Some Of The Expenses That May Be Considered Include:
- Food and clothing
- Health care
- Health and/or disability insurance premiums and/or health savings account contributions
- Necessary care and support of an elderly, chronically ill, or disabled member of your household or member of your immediate family who is dependent on you.
- Public transportation costs
- Court-ordered payments
- Education expenses for dependent children younger than 18, up to $170.83 per child
- Tuition for job-related education or for services for a physically or mentally challenged dependent child if no similar public education is available
Each expense is calculated according to the number of people in your household, and health care costs are calculated separately according to whether individuals in the household are younger than 65 years old or 65 or older. There are additional caveats and conditions throughout the test.
If whats left when you deduct allowable expenses from your income your disposable income is more than the median monthly income in the state, you fail the means test and are presumptively ineligible to have your debt discharged by filing for Chapter 7 bankruptcy although you may still qualify for a discharge based on a showing of special circumstances.
To calculate the means test, you must submit the completed Chapter 7 Statement of Your Current Monthly Income and the Chapter 7 Means Test Calculation form , which may remind you of tax forms.
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Who Qualifies For The Bap
You will qualify for the Bankruptcy Assistance Program if you:
- Have contacted at least two LITs and have not been able to work out a lower payment plan with them
- Are currently not in jail
- Have not been recently involved in any commercial activities like selling goods or running a business
- Dont have sellable assets
- Dont have surplus income .
How Do They Determine Surplus Income Payments
This standard is based upon the Low-Income Cutoffs based on urban areas with 500,000 people or more. If you make anything above the amount specified for a family of your size, then you must pay additional amounts during bankruptcy.
The current standard establishes the minimum monthly amount needed for a family unit or single person. That is subtracted from the amount earned by your household to determine your household surplus. Once they determine the surplus, the original salary is divided by the additional salary. Then the percentage goes to the surplus to give the family situation adjustment. Finally, the adjusted surplus is multiplied by 50%, which is the amount that you must pay for your surplus income.They can adjust the payoff if the individual has a pay increase, pay decrease, is in sales, gets a lump sum, or other financial changes. Changes can also make the payoff period extend.
Below is a chart showing the income standards and how much surplus income you can expect to pay based on the size of your household and monthly income. You can download a PDF in English and French that defines surplus income, as well as a more detailed look at the methods used to determine payoff amounts. Your Licensed Insolvency Trustee can also explain this in more detail.
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Squeeze Your Budget To Cut Out Excess Spending
If you have a budget, great. Now, reexamine it. See if there are efficiencies available.
If you dont have a budget, well. We might be onto a clue about your financial fix. Time for a hard look at whats coming in, and where your money goes.
Examine your spending. Find where youre leaking money on unnecessary expenditures. Everybody points out lattes and eating out and going to movies on opening night and resetting your thermostat and pumping mid-grade gas instead of premium, and wed be remiss if we didnt join the chorus: If youre in so much trouble youd like to declare bankruptcy , eliminate the low-hanging fruit in your budget immediately.
Consider assembling budgeting tools: a spreadsheet, a journal, and, naturally, apps. Some apps and platforms perform automated tracking and categorizing, and deliver alerts when you overspend.
Do you have subscriptions for services you dont use or underutilize or even dont like? Are they on autopilot theyre paid and renewed automatically? There are apps and platforms for curbing that spending, too, among them Trim, Truebill, Prosper Daily, HiatusApp, ClarityMoney.
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British Citizenship Applications And Immigration Status
Being declared bankrupt could have an impact on your immigration status or any application you’re making for British nationality. You should make sure you understand how it might impact you before you go ahead with a bankruptcy application.
- More about the impact of bankruptcy on applications for British Citizenship or your immigration status
Your Insolvency Trustee Administers The Insolvency Process
Your LIT will guide you through the entire bankruptcy process from start to finish if you decide that filing for bankruptcy is the best option for getting your fresh financial start.
The trustee will help you prepare your bankruptcy paperwork, and will submit the paperwork to the OSB which will officially start your bankruptcy.
Your Licensed Insolvency Trustee will generally administer your bankruptcy, will collect your payments, calculate any surplus income payments , and will collect any of the assets that you will lose and will sell these assets and distribute the funds to your creditors.
Many debtors lose no assets when claiming bankruptcy, and your trustee will explain any assets that you will lose before you make the decision about filing for bankruptcy.
You can explore bankruptcy alternatives which will allow you keep assets that might be lost in a bankruptcy.
Who Will Know Ive Gone Bankrupt?
Although bankruptcy records are publicly accessible, in almost all cases no one other than your creditors will find out about your bankruptcy unless you tell them.
In rare cases a notice in the legals section of the newspaper will appear but this is only in the case of a bankruptcy with many high-value assets.
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Do I Need To Go Bankrupt
Your trustee will help you assess your debt and will discuss your financial situation and assets with you to help you determine if filing for bankruptcy is right for you or whether you have other options.
Please take this filled out Bankruptcy Form to the meeting so that the trustee has all your relevant information and can, therefore, give you the best advice.
Am I Eligible For Filing For Bankruptcy?
In order to be eligible for bankruptcy in Canada you must owe at least $1,000 and be unable to pay your debts as they become due.
The trustee can help you explain all of your debt relief options including making a consumer proposal or declaring bankruptcy.
How Can Our North Carolina Chapter 7 Bankruptcy Lawyers Help You
The compassionate bankruptcy attorneys of the Sasser Law Firm have dedicated our careers to helping individuals, families, and businesses start over financially. We are board-certified bankruptcy lawyers who favor a straightforward approach to evaluating cases, and who will tell you the options that will suit your situation best, including steps you could take to avoid bankruptcy.
The Sasser Law Firm has helped more than 8,500 people and businesses file for bankruptcy in Raleigh. Our North Carolina Bankruptcy attorneys work one-on-one with clients, and we act promptly and with consideration for time-sensitive and complex cases.
Contact us today to discuss your case in a free consultation with our Raleigh bankruptcy lawyers. We work with clients from throughout North Carolina, including in Wake, Harnett, Johnston, Durham, Orange, Granville, Vance, Franklin, Warren, Nash, Lee, Chatham, and Moore counties. Call now.
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Alternatives To Chapter 7
Debtors should be aware that there are several alternatives to chapter 7 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Under chapter 11, the debtor may seek an adjustment of debts, either by reducing the debt or by extending the time for repayment, or may seek a more comprehensive reorganization. Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code.
In addition, individual debtors who have regular income may seek an adjustment of debts under chapter 13 of the Bankruptcy Code. A particular advantage of chapter 13 is that it provides individual debtors with an opportunity to save their homes from foreclosure by allowing them to “catch up” past due payments through a payment plan. Moreover, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be an abuse of chapter 7. 11 U.S.C. § 707.
Debtors should also be aware that out-of-court agreements with creditors or debt counseling services may provide an alternative to a bankruptcy filing.