Not Everyone Who Wants Bankruptcy Qualifies

If you are struggling with your finances and are considering filing for bankruptcy, consider this: not everyone who thinks bankruptcy can solve their financial woes will necessarily qualify for it. Chapters 7 and 13 are the two most common forms of bankruptcy that individuals seek, and both have a number of rules that can be disqualifying. These limits were designed to prevent abuse of a system that was created to assist individuals who are facing real financial hardship and who need a fresh start financially.

Chapter 7: Means Testing

For those seeking Chapter 7 relief, there is means testing that weighs the ratio of disposable income against debt obligations. It’s basically a comparison of one’s income over the previous six months to the median income of like-sized households in Florida. If personal income exceeds the threshold for a household of the same size, Chapter 7 will not be an option.

Previous Filings for Bankruptcy 

While it’s possible to file for bankruptcy more than once, the timing does make a difference. When it comes to filing for a new Chapter 7 bankruptcy, previous Chapter 7 filings must be eight years behind you, and Chapter 13 filings must be six years behind you. The wait time for a Chapter 13 filing is a bit more forgiving, with the wait just two years from a previous Chapter 13 filing and four years from a Chapter 7 discharge.

Failing to Meet Credit Counseling Requirements

Regardless of the type of bankruptcy sought, it is mandatory that applicants take a credit counseling course within three months of filing. That course must be from a provider who is approved, and failure to meet this requirement results in an automatic disqualification of your application.

Engaging in Fraud 

If fraud is discovered such as by making duplicitous transfers or attempting to conceal income within the past 12 months, or destroying records related to finances or otherwise lying on application forms, not only will the case be rejected; criminal charges may also result.

Luxury Acquisitions

An application can be disqualified if applicants receive a cash advance of over $1,000 within 70 days of filing or if luxury purchases of $725 or more are posted to your credit card criminal charges.

Your Bankruptcy Advocate 

Roughly 99 percent of bankruptcy cases are, indeed, approved. But the rules and regulations surrounding bankruptcy are complex and unwieldy. At the Law Office of Julia Kefalinos, our bankruptcy attorneys always work to achieve the best possible outcomes for you. To discuss your situation, contact our Miami bankruptcy lawyers today.

Source:

cbsnews.com/news/what-disqualifies-you-from-filing-for-bankruptcy/