BANKRUPTCY
““Although no one can go back and make a brand-new start, anyone can start from now and make a brand new ending.” ”
Change starts now. Sometimes, we need a reset. Bankruptcy affords the unique opportunity to do just that.
So, where do we begin?
The Client Intake Interview
Our attorney meets with you to discuss what qualifies an individual to file for bankruptcy. This means gathering a financial summary. Be prepared to disclose all of your assets and debts at this interview. Our attorney will help you organize it all in to a package to present to the bankruptcy court. It is also important at this time to create a budget. If high schools taught personal finance it would all revolve around a monthly budget. Unfortunately, most don’t which is why a lot of people find themselves exactly where you are. The monthly budget considers the amount of money that one makes monthly and what expenses are necessary. It is required of you at this point to get on a written budget. The budget helps our attorney make a legal determination regarding whether you meet what is called the “means test”. More on that to follow. At this interview, you will also need to be prepared to present paystubs, bank information, tax information, and other financial documentation.
The Means Test
The means test is a standard that the court applies in determining whether an individual qualifies for filing Chapter 7 bankruptcy, if their household income is above the North Carolina’s median family income. The test takes into consideration your current monthly income, and the income of your spouse, your actual expenses, and different debt types, whether it be secured or unsecured.
If you do not qualify for Chapter 7, it may be necessary to qualify for Chapter 13.
Chapter 7
A Chapter 7 filing discharges, or wipes out, most your debts and gives you a fresh start. Chapter 7 filers normally have credit card debt, medical debt, personal loan debt, and other unsecured debt. These can be wiped out through a Chapter 7 filing. There are some types of debt that cannot be wiped out. For instance, you cannot wipe out taxes, alimony, child support, and student loans.