Requirements To File For Bankruptcy

Many people today find themselves in debt that they simply cannot handle

. They may have lost their job, or maybe they had large, unexpected medical expenses to add to their existing monthly bills. No matter what the reason may be, sometimes the only option people may have to get a fresh start is to declare personal bankruptcy. Bankruptcy Attorney San Diego is there to guide you every step of the way.

US residents can file for personal bankruptcy either through Chapter 7 or Chapter 13 bankruptcy plans. However, whichever plan people may choose, there are various requirements that they must meet first. First of all, they must have lived in the state, where they want to file, for no less than three months.

Those people, who choose to file Chapter 7 bankruptcy, will have to release some of their assets, but the plan will help them get out of most all of their liabilities. On the other hand, individuals who choose to file Chapter 13 bankruptcy can maintain most of their assets, paying small payments over an agreed-upon time-period.

Before the year 2005, it was quite easy for people to file Chapter 7 bankruptcy. However, in October 2005, officials passed the Bankruptcy Abuse Prevention Act, which made it a bit more difficult for consumers to opt for this route. Before people can file a Chapter 7, they must first pass a "means test." If you have any difficulty understanding these new requirements, San Diego bankruptcy Attorney can explain to you all the details about these new laws.

For people to pass this test, they must prove that they cannot pay any of their debts, not even a small portion of them. They must provide a recent tax return with their bankruptcy application, and their income must be well below the average income in the state where they reside.

Finally, they must obtain some form of credit counseling to determine that they, indeed, are in need of filing bankruptcy. If the customer has credit card debt San Diego Debt Relief attorney will be the best choice for them. After people file for Chapter 7, the courts determine that applicants are not eligible for this plan of bankruptcy; applicants will then need to opt for Chapter 13.

There are some fees involved with filing for bankruptcy such as court filing fees, credit counseling fees and attorney fees. It is essential that people obtain a bankruptcy attorney to handle their case for them, as attorneys know the best routes for people to take.

Consumers should also know that there are some debts that they may not be able to eliminate such as child support payments, student loans, taxes, alimony payments and DWI fines. However, when people are in deep debt with credit card bills, personal loans and high medical bills, filing for bankruptcy may be the only way for them to get back on their feet.

by: Johnny Lowery

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