Who can file for bankruptcy? In general, any individual who finds themselves in over their heads financially can file for bankruptcy, but not every person will qualify for each type of bankruptcy. If you are unable to afford your bills and are pursuing bankruptcy for honest reasons, then there is a good chance you will be able to receive debt relief by filing for bankruptcy. If you have previously filed for bankruptcy, however, this may limit your options significantly.
While the majority of people considering filing bankruptcy are probably eligible to use the protections afforded by it, you need to know upfront so you can make an informed decision about your future. Knowing what to expect goes a long way towards helping you prepare for bankruptcy effectively. Not everyone can file for all bankruptcy types and others may not realize there are limitations with timelines, exemptions, disposable income, and dischargeable debts.
This article will provide you complete details on who can file for bankruptcy, requirements for filing bankruptcy and how often you can file for bankruptcy.
You Can Only File For A Bankruptcy Every Eight Years
How often can you file for bankruptcy? If you have filed for Chapter 7 bankruptcy recently, you will not be eligible to file another Chapter 7 bankruptcy for eight years, this is how long one have to wait for filing bankruptcy again. Bankruptcy is designed for the debtor with too much debt and no way to repay it, but coming forward in good faith to pay the debts. You cannot file for bankruptcy, for example, to defraud your creditors. If you are facing financial difficulty, you cannot run up large debts with the intention of filing for bankruptcy after the fact.
There are specific records requirements including proof of your income in the six months before filing your personal tax returns and the certificate of your attendance at a mandatory credit counseling class as well. There are two basic types of bankruptcy; Chapter 7 and Chapter 13. A liquidation or fresh start bankruptcy are the common terms used to describe Chapter 7 bankruptcy and you can keep certain types of property.
Chapter 13 bankruptcy involves setting up a repayment plan over the course of three to five years that allows you to keep certain pieces of property. Before you are eligible to file for bankruptcy you need to consult a non-profit credit counseling agency that has been approved by the United States Trustees Office. This identifies whether or not there are any alternatives to bankruptcy that could work for you. Consulting with a lawyer well in advance is strongly recommended if you are contemplating filing for bankruptcy as this can help illuminate you to other options as well as the individual rules and exemptions that may apply to your case.