Can I File For Bankruptcy – Scottsdale?

Bankruptcy may be the only solution in some cases but there are major consequences should you choose this route. Read on to learn more.

Consider The Following:

• Bankruptcy can do severe damage to your credit score and should be considered as a last resort.
• As an alternative, you may be able to negotiate with your creditors and work out a payment plan or other satisfactory arrangement.
• If you decide to file for bankruptcy, you have two basic options: Chapter 7 and Chapter 13.
• A Chapter 7 bankruptcy will sell off many of your assets to pay your creditors. In a Chapter 13 bankruptcy, you keep the assets but must repay your debts over a specified period.

Before Filing Bankruptcy

You should consider alternatives that may do less damage to your credit and are less expensive than bankruptcy such as:

• Finding out if your creditors are willing to negotiate.
• With a home mortgage seeing if there are options available such as alternative repayment plans or loan modifications available.
• Even the often dreaded IRS are willing to negotiate and offer payment plans.

Chapter 7 Means Test

The courts impose this test to determine whether you are eligible for Chapter 7. The test compares your average income over the previous six months with the median income for a household of your size in your state; if you earn less than the median, you should be eligible for Chapter 7. If it is greater than median you may still be eligible after you have subtracted allowed expenses. if you still do not meet the criteria, you will need to look at Chapter 13 options.

Source: https://www.investopedia.com/articles/pf/07/bankruptcy.asp