Many people are under the impression that anyone can file for bankruptcy protection. In fact, current laws require that any applicants meet specific criteria before the court entertain a petition. Here are some examples of what sort of conditions the debtor must meet in order to file for a chapter 7 bankruptcy in Fairfield, OH.
Passing the Means Test
One of the first points to consider is the relationship between the financial resources and the debts carried by the individual. Someone who makes over a certain amount of money per year, and has debt that is under a specified amount, may not pass what is known as a means test. This simply refers to the ability of the debtor to repay the debt. People who generate under a certain amount each year will not have a problem meeting this requirement.
The Type of Debt Involved
Not all types of debts can be discharged as part of a chapter 7 bankruptcy in Fairfield, OH. For example, if the debtor has only recently filed tax returns for the last several years, any money owed will be considered priority debt and cannot be included. Student loans are another example of debt that cannot be included in this type of action. If priority debt is the most pressing concern of the client, a lawyer is likely to recommend filing for a hacpter 13 bankruptcy instead.
The Sale of Eligible Assets
It is important for the debtor to understand that the court will not just wipe out all the debt after a few months. The bankruptcy trustee will determine if the debtor has any assets that are considered eligible for sale. If so, those assets are sold and the funds distributed to the creditors according to a plan approved by the court. Any debt that remains after the proceeds from the sale are distributed can then be discharged.
Keep in mind that bankruptcy may be the only viable alternative. Arrange to meet with attorney R. Dean Snyder and go over the particulars of the situation. After assessing the specifics of the client’s financial condition, it will be easier to determine if filing for bankruptcy is really the most practical move to make.