Do I Qualify to File Bankruptcy?

15 Dec Do I Qualify to File Bankruptcy?

Qualification to file Bankruptcy. This seems to be a major concern for many people. The truth is that if you are having trouble paying your bills, you qualify to file for relief under the Bankruptcy act.

As my colleagues have written, there are several kinds of bankruptcies.  See the excellent article by my friend, Susanne Robicsek.

Businesses can file either a chapter 11 or a chapter 7 bankruptcy and consumers can file either of those two or under chapter 12 or chapter 13.

Chapter 11 is generally used by businesses to reorganize their debts.  But it too can be used by individuals, predominantly when they don’t meet the criteria of a chapter 13.

Anyone, business or not, can file for chapter 7 relief.  The only limitation is that a consumer can file only if their income does not greatly exceed their expenses (and there are limitations on the kind and amount of expenses one can claim).

If there is excess income, generally a consumer can file a Chapter 13 bankruptcy.  Here, too, however, there are limits.  If your unsecured debts exceed $336,900 or your secured debts exceed $1,010,650 then you can’t file this kind of bankruptcy.

But if you don’t qualify for a chapter 13 and don’t want to or can’t file a chapter 7, you can always file a chapter 11 bankruptcy.

The decision to file bankruptcy and what type would be best for you is not a casual problem.  It is always best to consult competent bankruptcy counsel to discuss these issues.  Just remember that there is almost always a way to get relief from your debts if needed.

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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.
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