Can Anyone File For Bankruptcy?
This is actually a trick question. Can anyone file for bankruptcy? Now legally, yes, any American citizen can apply for bankruptcy relief. In practice, whilst you can apply, there is no guarantee you will make it past the first phase. In fact, those going through the filing process without legal assistance rarely make it through to a satisfactory conclusion.
Bankruptcy as a legal right has been modified over the years to bring protection to those in serious need and to creditors who have a right to what is owed to them. Bankruptcy then is designed to do the best possible justice to both parties.
If the debtor is in a situation where repayments are impossible, a Chapter 7 petition is generally their best approach – so long as they pass the means test. Most people who are in this situation will pass this means test.
On the other hand, if the debtor has some income, and the debt can be serviced by reducing payments then a Chapter 13 debt reorganization petition is the best approach.
The Chapter 7 approach will see a debtor stripped of their non-exempt assets, which are sold off to repay some of the debts. After that, the debt is written off totally. In these cases, the debtor loses (their assets) and the creditor loses (the balance of what is owing).
In a Chapter 13 filing, the debts are repayed over time. The debtor gets to keep their assets and the creditor receives their rightful payments, albeit a little slower than planned.
Yes, anyone can file for bankruptcy. However, not everyone meets the criteria and will find their applications to the courts rejected. Filing for bankruptcy is now a complex process so hiring a competent bankruptcy specialist is the only to ensure your passage through the bankruptcy court is as smooth as possible.
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October 13th, 2010 at 1:11 am
Precisely, anyone can actually file for bankruptcy but if your debts are not overwhelming and you have higher than average income that is stable, then certain non-bankruptcy option may be available to you. But the best thing to do is consulting it to bankruptcy attorney may help you with your decision whether to file or not.
October 21st, 2010 at 1:20 am
Absolutely Yes, assuming you have completed the necessary steps beforehand. There are restrictions on filing for Chapter 7 bankruptcy, but these restrictions will not prevent you from being eligible for Chapter 13. Under the updated law, an individual debtor who earns more than the median income in his or her state may not be eligible to file a Chapter 7 case. (You can find more information about the differences between Chapter 7 and Chapter 13 bankruptcy later in this chapter.)
Federal law protects your right to file for bankruptcy. For example, you cannot contract away your right to file for bankruptcy relief. Also, you cannot be fired from your job solely because you filed for bankruptcy. Bankruptcy is a legal state wherein an individual or entity declares an inability to meet financial obligations. There are many types of bankruptcy, all of which seek to help debtors get out from unbearable debt and help creditors recover as much of their money as possible. In the process, both sides usually make some compromises. In some cases, bankruptcy involves debt forgiveness, but increasingly, this sort of relief is unavailable to most filers.
February 23rd, 2011 at 9:26 pm
I would like to contribute with this. Personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations. Also, unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or lien on it.