You may have finally made the big decision to file for bankruptcy, but it would be in your best interest to take a look at some common issues that filers often encounter when doing so. You want to ensure that your chapter 7 bankruptcy goes as smoothly as possible, so read on to learn more about some common bankruptcy problems and how to deal with them so that you can make your fresh financial start.
What is your income?
At one time, income was not taken into consideration when declaring bankruptcy and that meant that the number of people using bankruptcy to get out of debt was at an all-time high. Now, your income must not exceed the median income for your particular state. If your income is too high, there are some deductions you can take. For example, if you have extraordinarily high medical bills or a large mortgage payment, you may be able to deduct enough income to still file a chapter 7 bankruptcy.
Speak to your bankruptcy attorney about the deductions, but in the mean time you can use an online calculator to find out the median income allowed in each state. You might also consider filing for a chapter 13 bankruptcy, which has no income limits. This form of bankruptcy allows you a longer amount of time to pay back your creditors.
Have you ever filed for bankruptcy before?
You can file for chapter 7 bankruptcy more than once, and in fact there is no limit to the number of times you can file in a lifetime. There are, however, rules about how long you must wait before filing again. If you want to file a chapter 7, you have to wait 8 years at a minimum before you can file again. This is 8 years for the discharge date, and not the date you initially filed.
Did you previously commit bankruptcy fraud?
Allegations of bankruptcy don't always mean that you are barred for life, so you may be able to file again depending on the outcome of the previous issue. The bankruptcy court will review the previous incident and make a ruling based on the severity of the fraud, your intent and other factors. If you had a previous case dismissed "with prejudice", you may be facing a lifetime bar on filing, however.
Talk to your bankruptcy attorney about these issues to learn more and see how you can get debt relief fast.