Bankruptcy Practice
A bankruptcy is not something to be taken lightly. But sometimes a severe remedy is the only solution to a severe problem. You can end the threatening phone calls and the worry over losing your home or your car. You can stop a wage garnishment that leaves you destitute. You can end your sleepless nights.
This is regarded as the general discharge bankruptcy. At the end of the process your debts are all discharged, with the exception of student loans, child support and some taxes. But not everyone qualifies for a chapter 7. If your debts are primarily business debts or tax debts, you should qualify for a chapter 7. However, if your debts are mostly consumer debts, you will qualify for chapter 7 only if you can pass a means test. Basically it is a comparison between your income and your living expenses. It is a complicated process. If you do not pass the means test you will have to file a Chapter 13.
This plan allows those with a regular income to consolidate their debts into a 3 or 5 year plan. The plan must provide that those secured creditors such as home mortgage companies be paid enough to catch up on past due payments, while you stay current on payments throughout the plan. The Chapter 13 plan Unsecured creditors such as credit card companies are paid a percentage of what is owed. A Chapter 13 allows you to avoid home foreclosures and car repossessions.
