Monday, April 1, 2013

Bankruptcy - Who Can File - Boise Bankruptcy Attorneys

As a Boise Bankruptcy Attorney, I often hear from people that they are confused about who and when you can file for bankruptcy.  Today, I will give a quick overview of the who and when of bankruptcy.  In addition, I often get questions about when it is advantageous to file for bankruptcy.  I will also address some examples of that today.

Who Can File For Bankruptcy?
Anyone who meets the requirements for the various forms of bankruptcy can file for the protection it provides.  This includes businesses.  While, technically, a business isn't a person and visa versa, the protection granted by the Federal Court extends to entities. 

Some examples of who can file for bankruptcy include and individual who meets a financial criteria test (Chapter 7), an individual who does not meet the financial test of bankruptcy but who needs to make a payment plan (Chapter 13) or a business which needs to restructure its debt payments (Chapter 11).


When Can You File For Bankruptcy?
In most cases, if you need the protection of bankruptcy it is there for you.  However, there are limits on how frequently you can file and which Chapter will apply to you.  For example, if you have filed for Chapter 7 within the past 8 years,  and received a discharge, you may not file for Chapter 7 again before that time frame has expired.  If, however, you find yourself in a financial situation where you can't pay your debts, you may qualify for a Chapter 13 after four years, even though you might meet the means test required for a Chapter 7.  Not to further complicate the issue, but there are more limits.  If you need to file for Chapter 7 after you have filed a Chapter 13, you need to wait six years.  In this situation, however, you may actually be able to get a complete discharge of unsecured debt under a Chapter 7 before the six year period if you have paid 70% of your secured debt.  In order to file a Chapter 13 bankruptcy a second time, you must wait two full years from the date of filing.

Mortgage Foreclosure and Asset Protection
The obvious reason for filing for bankruptcy is to discharge your debt or to get a repayment plan to restructure debt.

These are two situations where there can be a reason, other than financial protection, for filing bankruptcy.  If you are behind on your mortgage, filing a Chapter 13 bankruptcy can protect your home.  This allows you to pay off the arrerages over a period of time so that you are not foreclosed against.  Chapter 13 will allow you to make a payment plan for repayment for the mortgage debt as well as your other debts.

Another situation which can provide an important reason to file bankruptcy beyond a financial consideration, is the protection of assets.  By law certain pieces of property are exempt from being used to cover your debt.  If you have an asset associated with your financial livelihood, for example, it doesn't make any sense for a court to take that asset away.  If you have debt associated with that asset you can file for Chapter 13 and make payments on the back debt, thereby protecting your asset.

If you need to speak to a Boise Bankruptcy please give us a call, 208-472-2383.  You will be glad.

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