Who Qualifies for Bankruptcy?

Do I qualify to file bankruptcy?  This is one of the most common questions I am asked as a bankruptcy lawyer when I meet with debtors who are hoping to obtain relief from their debts in bankruptcy court. My answer is usually yes, since almost everyone qualifies for bankruptcy under either Chapter 7 or Chapter 13 of the Bankruptcy Code.

I think that this question is often asked because of common myths and misinformation that people hear with regard to what bankruptcy is and what it does for the debtor.  Unfortunately, there is much misinformation being passed around.  It is rare that someone would not qualify for a filing under either chapter of the Bankruptcy Code. If there are horror stories, they typically arise out of situations where someone did not disclose accurate information to the bankruptcy court.

In order to qualify for bankruptcy relief, the debtor needs to have a reason to file.  The primary reason for most debtors is their inability to pay their debts.  Whether or not the debtor owns assets is not a consideration in qualifying to file for bankruptcy.  Under New York’s bankruptcy exemptions, a single filer can protect $50,000 in home equity and $2,400 of equity in the vehicle, and there are other exemptions available for other classes of assets.

There is no minimum requirement as to how much debt a debtor must have before filing, nor does this debt has to be reduced to a specific figure.  Also, if you are filing Chapter 13 Bankruptcy, you are not limited with respect to the property that you can own, but the amount of property may be a factor in the amount of payments under the plan. While there are maximum limits of the amount of debt that can be discharged under either Chapter 7 or Chapter 13, the vast majority of debtors will not even approach them. In Chapter 7, there are no maximum debt limits. As a result, that Chapter 7 Bankruptcy is available to the debtors regardless of how much debt they owe, and its availability is only limited by the means test.  In Chapter 13, you may not have more than $1,010,650 in secured debt and $336,900 in unsecured debt.

If you are contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, New York, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.

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