Being Eligible For Bankruptcy
The qualification procedure is likely one of the most essential factors. Although many individuals seek total debt relief, not everyone will qualify for Chapter 7 debt discharge. If a debtor's income exceeds the state's median income level or their disposable income is sufficient, they may not qualify for Chapter 7. Many individuals will qualify for Chapter 13 debt repayment in these circumstances.
Knowing the eligibility requirements prior to filing for bankruptcy can prevent a debtor from submitting the wrong case or being disqualified due to certain actions. Accumulating too much debt within 90 days prior to filing, relocating assets strategically, or acquiring more income can all disqualify a person from bankruptcy eligibility.
Obtaining A Debt Discharge
As soon as a debtor qualifies for a specific form of bankruptcy, disclosing all of their debts and assets to the court becomes a top priority. On the bankruptcy petition, it is imperative that the debtor provide a complete inventory of both debts and assets. Withholding information can imperil the outcome of the case and prevent the granting of a discharge.
In a Chapter 7 proceeding, the court will examine the debtor's assets and liabilities. The court will determine whether there are sufficient funds or assets for liquidation to satisfy creditors' claims. If not, the court may grant a debt discharge, requiring creditors to comply and delete the debts from the account of the debtor. In general, the majority of substantial assets, such as a residence, automobile, personal property, and benefit funds, are exempt from liquidation.
In a Chapter 13 case, the court will analyze the debtor's debts and assets to devise a repayment strategy. This strategy typically entails consolidating all debt payments into a single monthly obligation over the next three to five years. The debtor will be granted an absolution once all debts have been repaid.""
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