A Riverside Bankruptcy Attorney Can Help You Determine Whether Bankruptcy Is Right for You
As a Riverside County bankruptcy attorney, we can take you through the bankruptcy process so that you and your family can get out from under your debts. We know that it is possible for even the most responsible people to end up in a difficult financial situation. Whether you suddenly lose your job, have unexpected medical bills or have major house expenses, things can add up quickly and make it difficult to be able to keep up with your payments. In this situation, bankruptcy may be your best option for getting caught up and moving forward.
Two Most Used Types of Bankruptcy, Chapter 7 and Chapter 13
To find out if you qualify, call our office and schedule an appointment. The first thing that we will do is discuss your current financial situation to determine if you qualify for a Chapter 7 liquidation bankruptcy or if you need to file a Chapter 13 reorganization bankruptcy. To qualify for a Chapter 7, you must take a means test. To get started, we will need to calculate your monthly income. This is done by looking at how much money you made over the past six months and then taking your monthly average. For example, if you made $8,000 in month one and were laid off to then only make $3,500 during months two through six, your average monthly income would be $4,250. In situations like this, some people wait until their month of high income has fallen out of the sixth-month window. As a Riverside County bankruptcy attorney, once we have your monthly income, we can deduct certain expenses from it. Things like your taxes, secured debt payments to your mortgage and car, daycare expense, babysitters, health and life insurance, medical expenses, child support payments, and required payroll deductions will all be deducted from your monthly income. What is left is your disposable income and that amount is used to determine whether or not you qualify.
Deduct Personal Expenses to Qualify for Bankruptcy
Given the allowable deductions, most people qualify to file a Chapter 7 bankruptcy. Some, however, do not and in this case, we can walk you through the process of filing a Chapter 13. In this scenario, we will review all of your unsecured debts and create a proposal for how much you want to pay towards them. In many cases, people will propose to pay 30 to 40 percent of what they owe but this really depends on your particular situation. The plan must be presented to the court and it has to include what you will pay monthly, what each creditor will get and how long you will make the payments for. In most cases, the payments go on for around five years. If the judge agrees that you have the right amount of income to stick with the payment plan, they are likely to approve it. During that timeframe, you will be required to make one monthly payment to the trustee and they will distribute the money to your creditors. As long as you continue to make the payments on time, they will not try to collect anything else from you and the remaining debt will be discharged at the end of the process. To learn more, call and speak with a Riverside County bankruptcy attorney today.