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Will I Qualify for Bankruptcy?

Will I Qualify for Bankruptcy?

Bankruptcy Requirements in California

Bankruptcy is not something that can be pursued by anyone. There are certain requirements that must be met. Since bankruptcy is a federal legal process, the laws and regulations regarding bankruptcy are found in the U.S. Code: Title 11, also known as the U.S. Bankruptcy Code. This code requires consumers to prove that they have insufficient income to repay their debts, therefore ensuring that no one can wrongfully take advantage of the bankruptcy process for their own benefit.

Qualifying for Chapter 7

Chapter 7 bankruptcy or "liquidation bankruptcy" is the most difficult type of bankruptcy to qualify for. Before filing, a consumer must first pass the means test to prove that they have little to no disposable income after paying for their living expenses. If you take the means test and your disposable income is less than the state average, then you qualify for Chapter 7. Otherwise, you may qualify for Chapter 13 bankruptcy.

Qualifying for Chapter 13

Consumers who do not pass the means test, but can still prove that they have insufficient disposable income to repay their debt within a reasonable period, may file under Chapter 13. Even those who pass the means test and qualify for Chapter 7 may sometimes benefit best for Chapter 13 bankruptcy. Under this chapter of the Bankruptcy Code, consumers avoid liquidation. Instead, they continue to make monthly payments for the next 3 – 5 years, after which time their eligible debts are discharged.

Need a bankruptcy lawyer in Irvine? Call us now!

Contact us at Peter Rasla & Associates, P.L.C. if you are considering filing for bankruptcy. An Irvine bankruptcy attorney can review your situation and provide a case evaluation to help you take steps in the right direction. Call now at (949) 390-9994 or fill out our online case evaluation form to get started!