A lot of people are under the misconception that they no longer qualify for bankruptcy because of the changed laws. Bankruptcy attorney Benjamin Ginter runs the Law Offices of Benjamin J. Ginter in Cranford, New Jersey. Here, he says bankruptcy is still a viable option for many individuals although the bankruptcy laws have changed.
Filing for bankruptcy should not be considered an end, but a new beginning. You will have the opportunity to rebuild your credit and can even apply for car loans or home mortgages soon after filing. The procedure of filing can be complicated, but it will be successful if it is done correctly. A qualified and experienced bankruptcy attorney can help you every step of the way.
Filing For Chapter 7 Bankruptcy
It is still possible to file for Chapter 7 bankruptcy, although some of the main areas have changed. For example, you can now file for Chapter 7 bankruptcy once every eight years instead of every six years. Under the bankruptcy law, certain property is exempt. Often when you file for Chapter 7 bankruptcy, you are able to keep your property because of the exemptions.
Now you will face a means test and need a medium-income level to file for bankruptcy. Each state has set its own rules of medium-income level for a family of a certain size. Here in New Jersey, for example, if you have a household of four people, including children, the medium-income level has been determined to be roughly $103,000.
If you and your spouse make more than $103,000, you could not file for Chapter 7 bankruptcy. As based on your combined income, you could afford to file for Chapter 13 bankruptcy, which means you can make regular payments. However, a lot of people do not make the kind of income that would exceed this level, so they can still file for a Chapter 7.
If you are required to file for Chapter 13, you will have to show that you have expenses that prevent you from making the payments, and prove that you are correct in filing for Chapter 7.
Sometimes that is based on what you pay in mortgage payments or whether you have a car that you have to make regular payments on. You can make deductions from this and be able to file for Chapter 7, even though your income exceeds the medium-income level.
Understanding the complicated rules of filing for bankruptcy can be difficult, which is why many people seek the advice of a professional.