You may be in over your head with debt, struggling to fight off your creditor’s harassing collection activities, or even facing the threat of the foreclosure of your family home. Whatever your specific financial circumstances may be, you must know they are dire enough to qualify for a bankruptcy declaration. The question lies in which exact bankruptcy type you should declare. Read on to discover the different types of bankruptcy and how a seasoned bankruptcy attorney in Rockland County, at The Law Offices of Allen A. Kolber, Esq., can help you choose the one best fitting given your financial situation.
What are the different types of bankruptcy to choose from?
Generally, individuals may choose between two bankruptcy types: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Lucky for you, our firm has decades of experience handling each one.
On the one hand, Chapter 7 bankruptcy may allow you to get rid of most or all of your debts, namely your credit card debt, personal debt, medical bills, foreclosures, and automobile repossessions. Here, a court-appointed trustee will take your non-exempt assets, such as cash, luxury items, and non-retirement investments, and sell them to pay back your creditors, thus eliminating these debts. This is why this bankruptcy type is otherwise referred to as liquidation bankruptcy.
On the other hand, Chapter 13 bankruptcy may allow you to keep all your assets and restructure your debts so that you can pay back your creditors within three to five years. The way this works is by getting a repayment plan approved by the bankruptcy court. This bankruptcy type is also coined as a wage earner’s bankruptcy, as you likely need a regular income to execute this plan.
How do I know which bankruptcy type to petition for?
It is not so much about picking the bankruptcy type you prefer, but rather the bankruptcy type you qualify for. That is, Chapter 7 and Chapter 13 bankruptcy have separate eligibility criteria.
For a Chapter 7 bankruptcy, your income must be less than the average income in the county in which you live. For example, say that you are a family of one living in Rockland County. Well, as of 2024, your income must be less than $69,135 to qualify. If you are a family of two, three, four, or five, your income must be less than $87,550, $105,435, $131,389, or $141,289 to qualify, respectively.
This implies that you qualify for a Chapter 13 bankruptcy if you earn above the average income in Rockland County as of 2024. However, you must be aware that you may become disqualified if it is discovered that you have too much debt. Specifically, if you have over $1 million in secured debt and over $300,000 in unsecured debt. This may have you looking into bankruptcy alternatives, instead.
We strongly encourage you to retain the services of a competent Rockland County bankruptcy attorney. You may do so by scheduling an initial consultation with The Law Offices of Allen A. Kolber, Esq. today.
