There are two types of bankruptcy available to consumers. Both exist to assist persons who can no longer meet their financial obligations under their current circumstances. If you find yourself in a desperate financial condition and are considering filing for bankruptcy, a Bankruptcy Law Firm in Las Vegas can help you determine which type of personal bankruptcy would best suit your situation.
The first type of personal bankruptcy is called Chapter 7 bankruptcy. When you file for this type of bankruptcy, either all or some portion of your debts would be discharged. In order to obtain this relief, you must first apply all of your liquid assets toward the debt you owe. Liquid assets include funds held in bank accounts, cash, stocks, and bonds. Some of your liquid assets may be exempt from this action. Consulting with a Bankruptcy Law Firm in Las Vegas will enable you to determine what exemptions apply to you.
You do have to meet specific qualifications in order to file for Chapter 7 bankruptcy. You will have to pass a means test ensuring your income is low enough to qualify. This generally means you must confirm that your income is below the median income for a family of your size in your state. Your Bankruptcy Law Firm in Las Vegas can step you through this process. If you pass the means test and file for Chapter 7 bankruptcy, you will also be required to attend credit counseling sessions.
If you don’t qualify for Chapter 7 bankruptcy, you may qualify for Chapter 13 bankruptcy, which is the second form of bankruptcy for consumers. In this type of bankruptcy you will not be absolved of your debt, but will work with your Bankruptcy Law Firm in Las Vegas to devise a repayment plan that can be submitted to the court. This repayment plan will be based on a three to five year schedule, and is intended to make it more manageable for you to repay your debts.
Once a judge approves of your plan, you will begin making your payments to the court, which will then make payments to your creditors. While you do not have to pass a means test to file for Chapter 13 bankruptcy, you will be required to attend credit counseling sessions as with Chapter 7 bankruptcy.