Tough times are impacting all of us and many people simply cannot afford to meet their financial obligations. The bankruptcy process can be a way to start fresh and regain control over their financial lives. However, anyone considering filing for Chapter 7 should be advised about the basics before filing their petition.
How To Prepare
One of the biggest obstacles for debtors filing Chapter 7 is the qualification process. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act took effect, which requires anyone filing for Chapter 7 to pass a “means test”. This test is used to evaluate income and debt levels of a filer, ensuring that only those considered financially insolvent are eligible. Basically, Chapter 7 is reserved for those with significant financial hardships, all others with debt troubles may seek relief through Chapter 13.
Therefore, it is important that anyone considering bankruptcy be prepared for the qualification process. To do this, it is best to speak with a Dallas bankruptcy lawyer about their situation. Consulting with an attorney can help determine eligibility and ensure everything is in order to file the petition, such as financial records. It is important that a debtor have their financial records organized prior to filing, including items like paycheck stubs, the last two to five years worth of tax records, bank statements and statements from creditors. Having this information ready at the time of filing can help minimize errors on the petition and move the case along quickly.