If you are like most people, you might wonder “is Bankruptcy an option for me?”
We are here to guide you through the bankruptcy process.
If you are behind on your mortgage, car payment, hospital bills or even credit card debt, then bankruptcy can be a valuable option that can help relieve you from the weight of your debt and give you the fresh start you are looking for.
There are two forms of personal bankruptcy–Chapter 7 and Chapter 13. See the following pages for important details on how they differ. The first order of business is to determine with your attorney which chapter is best for you by completing a means test. The means test is used by the court to determine whether your income is low enough for you to file for Chapter 7 bankruptcy. It was designed to ensure that only people who need the assistance of a Chapter 7 can fully benefit from it.
Chapter 7 bankruptcy
A Chapter 7 is determined once you complete the second part of the means test. If you can show that there is little or no disposable income left at the end of the month, you qualify for Chapter 7 relief in South Carolina.
Providing your paystubs and deductions and your expenses can help To determine the median income for your household and which chapter is best for you specifically.
Chapter 13 bankruptcy
If you do not qualify for a chapter 7, chapter 13 is best for you. The means tests for a chapter 13 basically determines what percentage you have to Pay back to unsecured creditors. Like your stimulus checks and VA benefits do not count against you in the means test, or included in your income calculations. Which helps people better qualify.
Typically only individuals can file a 13, not a business. In order to qualify for the chapter 13, your secured debts cannot exceed $1,184,200 and your unsecured debts cannot exceed $394,725.00. This is for single filers. The amount is double for a joint case, husband/wife type scenario.
Chapter 11: The business bankruptcy.
This is often used by corporations and businesses.
The new subchapter V in chapter 11 was created for small businesses with less than $2,725.625. Although this was created for small businesses an individual can file under this subchapter as well. That limit has been extended under the cares act. This new addition code became effective on February 19,2020. Subchapter V is available to individuals or entities engaged in commercial or business who owe no more than $7.5 million in debt.
Like all chapters of BK there are always exceptions. We can help you determine if you meet those exceptions.
Feel free to start investigating your options immediately. Get in touch with us today.