If you are considering Watertown Chapter 7 bankruptcy for your financial situation, you will need to understand the Chapter 7 eligibility requirements. Every type of bankruptcy has its own eligibility requirements, and Chapter 7 has certain income requirements you must meet.
At Grady BK, PLLC, our goal is to provide our Watertown clients with the legal assistance they need as they navigate the process of filing for bankruptcy in Watertown, NY. We understand that finding the right NY debt relief can be overwhelming, which is why we strive to simplify this process so that you can proceed with confidence and peace of mind. We will help you determine whether or not Chapter 7 is the right fit for your situation and if you meet the eligibility requirements. In this article, we will be discussing what Watertown Chapter 7 bankruptcy is and who meets the eligibility requirements.
What is Chapter 7 Bankruptcy?
Before you start the process of filing for bankruptcy in Watertown, you need to understand what the different options include. Chapter 7 bankruptcy is a type of bankruptcy that involves discharging qualifying debts within a short amount of time. Depending on your specific situation, most of your property may also be exempt, which would allow you to keep it throughout the bankruptcy process.
Chapter 7 is quite different from Chapter 13 as it is a quick process that allows you to have the majority of your debts discharged (wiped away). Whereas, Chapter 13 is a repayment plan type of bankruptcy that allows you to pay back your creditors over a 3 to 5 year repayment plan.
Eligibility Criteria for Chapter 7 Bankruptcy
When deciding whether or not Watertown Chapter 7 bankruptcy is the right fit for you, you need to determine if you are eligible. The main eligibility requirement for Chapter 7 is the means test, which looks at your income.
If you are below the New York median for a household of your size, you are exempt from the means test and can proceed with filing for Chapter 7 bankruptcy. If this does not apply to you, you can use the means test calculator to determine your deductible expenses.
Deductible expenses can help you to show that even if you are not below the New York median income for a household of your size, you still qualify for Chapter 7. Examples of deductible expenses include things like childcare, income taxes, mandatory employment deductions, mortgage and car payments, alimony, etc.
Exempt Vs. Non-Exempt Assets
When you file for Chapter 7 you also need to understand that there is exempt and non-exempt property that is dependent on each individual situation. Non-exempt assets are things that you may lose when you file for Chapter 7, while exempt property is usually left untouched.
Exempt property usually includes things that you use on a consistent basis or need, such as furniture, clothing, tools of your trade, and vehicles. While non-exempt assets could include valuable family heirlooms, expensive possessions, collectibles, etc.
It is essential that you hire a Watertown, NY, bankruptcy attorney if you’re considering filing for Chapter 7. An attorney can help you determine whether or not you are eligible and, if so, can help you proceed with filing.
Who May Not Qualify for Chapter 7?
If you fail the means test and your income is too high, you won’t be able to file for Chapter 7. Additionally, you would not qualify for Chapter 7 if you have previously filed a bankruptcy within the last 8 years. You may also run into issues qualifying for Chapter 7 if you do not meet the documentation requirements or your case is flagged for fraudulent activity.
Alternatives If You Don’t Qualify for Chapter 7
If you have discovered that you do not qualify for Chapter 7 bankruptcy in Watertown, NY, the good news is that there are some additional options you could take advantage of. The next best option is to file for Chapter 13 bankruptcy, which allows you to create a repayment plan. A Chapter 13 bankruptcy gives you protection from creditors as soon as the bankruptcy is filed so creditors can not sue you, continue to add on interest/fees, etc.
Another option you could try to manage debt is through debt settlement, which would allow you to negotiate on a more realistic payment plan with your creditors. You could also seek the help of a credit counselor who can help you get a better handle on your finances and find additional strategies for managing your debts. There would be no protection from creditors with a debt settlement plan.
FAQ Section
How do I know if I pass the Means Test?
When you calculate the means test you use the previous 6 full months of gross income and multiply by 2 to get a projected yearly income. If that projected yearly is below the median income in NY based on your household size you would “pass” the means test. If you do pass, you can proceed with filing for Chapter 7.
Will I lose my home or car if I file for Chapter 7?
In most situations, people are able to keep their home and their vehicles when they file for Chapter 7 as long as they are current on their payments and can maintain ongoing monthly payments.
How long does Chapter 7 Bankruptcy stay on my credit report?
When you file for Chapter 7, this will remain on your credit report for 10 years after the date you have filed before it is automatically removed.
Watertown’s Top Compassionate Bankruptcy Attorney
If you are looking for NY debt relief, Chapter 7 bankruptcy may be the right fit for your financial situation. At Grady BK, PLLC, we will help you determine if you meet the means test for bankruptcy, and if so, we will help you with the filing process. Having a Watertown bankruptcy attorney on your side can help you proceed with confidence as you navigate the process of declaring bankruptcy.
At Grady BK, PLLC, our goal is to provide our clients with a personalized approach that takes your unique situation into account. Because of this, we will tailor our services to fit your specific bankruptcy needs whether you are researching your options or ready to file for bankruptcy.
Contact us today at 315-299-9005 to discuss your financial situation with a bankruptcy attorney in Watertown. Our team at Grady BK, PLLC, is here to provide you with the legal assistance you need as you navigate Chapter 7 bankruptcy.
