Preparing for Chapter 7 Bankruptcy
Chapter 7 bankruptcy, or liquidation bankruptcy, has been sharply modified under a recent law called the Bankruptcy Abuse Prevention and Consumer Protection Act, or BAPCPA. This law drastically changed a debtor’s options when approaching bankruptcy. In particular, the changes make it more difficult for a debtor to qualify for this form of bankruptcy. However, there are some things that a person can do to prepare for filing for Chapter 7 bankruptcy that can improve the chances of qualifying.
To discuss your legal options for getting out of debt, contact the Birmingham Chapter 7 bankruptcy lawyers of GREENWAY BANKRUPTCY LAW, LLC, by calling (205) 324-4000 today.
Preparing Financial Information
Before filing for bankruptcy, it’s crucial for individuals to gather all their financial information regarding their bank accounts, assets, income, debts, and personal property. Under BAPCPA, Chapter 7 bankruptcy now requires a test known as the means test, which compares an individual’s income to the average income in their state. To qualify for Chapter 7 bankruptcy, a person’s income must fall below the average income in their state. A person’s full financial information will be necessary to complete this means test.
Proof of Credit Counseling
A credit counseling requirement was another addition from BAPCPA. In almost all instances, an individual needs to prove that they have attended credit counseling and that their debt obligations were still too much to deal with outside of the court.
Checking for Exemptions
Chapter 7 liquidation means that an individual may have certain assets liquidated to pay back debts, unless they are protected by certain bankruptcy exemptions. These exemptions specifically help protect pieces of property that may have high personal worth or are critical to maintaining income.
If you are struggling under overwhelming debt, help is available. For more information regarding your bankruptcy options, contact the Birmingham bankruptcy lawyers of GREENWAY BANKRUPTCY LAW, LLC, today by calling (205) 324-4000.