Consumer bankruptcy is a way for someone to obtain relief from paying their debts. This category of bankruptcy includes both Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 bankruptcy dismisses a person’s debts without having to repay. Chapter 13 bankruptcy requires a debtor to repay creditors over an extended amount of time. To avoid having a bankruptcy petition dismissed, it is important for an individual to remember some bankruptcy considerations prior to filing.
Do I Need to Have an Income in Order to File Bankruptcy?
No, a debtor does not have to be employed at the time of filing. However, a debtor does need income at some point during the six months that precede their filing for bankruptcy.
Can I Discharge All of My Debts?
No. Some debts cannot be discharged, such as:
- Child support
- Spousal support
- Student loans
- Secured debts
- Child support
- Any credit card charges made after the debtor initially files for bankruptcy
Is Any Property Exempt from Creditors’ Claims?
Property exemptions are available to debtors in certain states. Exempted property is any item that a debtor is allowed to keep. These items are necessary for the debtor to keep in order for them to make a fresh start, such as a home or a car. A debtor must write the exemptions in a list and submit them to the bankruptcy court. It generally takes 30 days after the meeting of the creditors for the property exemptions to be allowed. Creditors can challenge any or all of the exemptions.
Can I Temporarily Get Rid of the Items I Want to Protect from Creditors?
No. A debtor cannot transfer any assets to another person to keep them from being included in the bankruptcy. The bankruptcy court may deny the bankruptcy petition if the debtor transfers any of their assets within one year of bankruptcy filing.
Should I Talk to a Lawyer about Bankruptcy?
Filing for bankruptcy is a complex and lengthy process. To avoid making any mistakes that could harm your bankruptcy petition, talk to a bankruptcy lawyer.