Does bankruptcy require qualification ? I hear that often in my consultations with consumers who are looking for some relief from their debts. The easy answer is “yes;” almost everyone in is entitled to some kind of bankruptcy relief.
Most often, the question arises because of horror stories the client has heard about not being able to file bankruptcy or how a filing ruined someone’s life. Those tales are generally misleading or just plain false. Rarely does someone not qualify to file. And even rarer still are the situations where bankruptcy hurt someone, and usually that happened because the debtor wasn’t honest with his attorney and the court.
So, what does it take? Well, you should have a reason to file bankruptcy. Usually it will be because you can’t pay all of your bills. Don’t confuse the inability to pay with a requirement that you must owe more than you own in assets. That simply isn’t true. For the most part, Californians can own a house with equity over $100,000, file bankruptcy, keep the house and get rid of, or significantly reduce, thousands of dollars worth of credit card or medical debt.
Nor is there a minimum amount of debt you have to have to file. You could owe a very small amount of money and still need a bankruptcy. And there is often no limit to the amount of property you can own, although having a lot of assets can mean that you’ll have to give some up or pay more in a Chapter 11 or Chapter 13 plan.
If you are reading this, you are probably behind in some payments and struggling to make ends meet. There are some pretty significant rules as to what kind of bankruptcy you can file and which type will be best for you. A competent bankruptcy attorney can review your circumstances and advice you as to whether you should file and if so, under which chapter.
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