Almost anyone who owns property in the United States or has a permanent residence or business here can file for bankruptcy under Chapter 7.This legal process begins when the debtor files a petition with the bankruptcy court, which can be done with the help of a lawyer who specializes in these types of cases. Individuals, spouses, and corporations or other entities are all eligible to file for bankruptcy. If you file for Chapter 7 bankruptcy, you must pass the “resource test” to determine your disposable income. If your income is above the average income in your state, you may still be eligible to file for Chapter 13 bankruptcy.
Individuals can file for bankruptcy without a lawyer, but it is generally not wise to attempt it without the help of an attorney with experience in bankruptcy proceedings. The Bankruptcy Code provides many forms of entities with the opportunity to declare bankruptcy. Chapter 7 bankruptcy can be filed by a corporation or an individual, while Chapter 13 bankruptcy can only be filed by a person. A Chapter 11 bankruptcy is a reorganization that can be filed by an individual or a corporation.
If you have filed for bankruptcy in the past 6 to 8 years, you may not be able to file for bankruptcy again. When a bankruptcy application is filed with a court, creditors are notified and can file objections if they wish to do so. The bankruptcy administrator assigned to your case will organize a creditors' meeting after the section of the bankruptcy code where it is mandatory. The American Bankruptcy Institute states that 95.3% of people who file for Chapter 7 bankruptcy are successful.
In theory, declaring bankruptcy benefits the overall economy by allowing individuals and businesses a second chance to access credit and by providing creditors with a portion of the debt repayment. Every person who files for bankruptcy must take a credit counseling course within 6 months prior to filing their bankruptcy application in court. Filing for bankruptcy can help release you from your legal obligation to pay your debts and save your home, your business, or your ability to function financially, depending on the type of bankruptcy petition you file.
