My wife and I made the decision to open a residential cleaning business. We needed enough money to get the equipment, do a bit of advertising and get the licensing and insurance to protect ourselves and our customers. For about two years, things went very well, but then, things took a terrible spin for the worst after we hired a few employees to help us with the workload. Since then, we have gone bankrupt and have gone back to working full time jobs. If you are struggling with your business and considering bankruptcy, this blog can give you some answers to the many questions that you have.
Chapter 13 bankruptcy offers several benefits over Chapter 7 bankruptcy, which is why many people use it to regain control of their finances. Among the benefits, one major one is the ability to keep the assets you own, including your house. The downside to this is that your income can affect your case, and here are three main effects your income can have on your Chapter 13 bankruptcy.
Your Ability To File
The first effect your income has on a Chapter 13 bankruptcy is your ability to file. In order to file for Chapter 13, you must have enough income to repay your debts, and you must have steady, reliable income. Chapter 13 is the branch of bankruptcy that requires you to repay your debts, and having enough income to do this is necessary.
If you are considering using Chapter 7, your lawyer will look at your income and determine if you meet the requirements. This is done using a means test. If your income is over a certain amount, you will not be eligible for Chapter 7, but you will be most likely be eligible for Chapter 13.
The income used in this calculation will include all sources of your household income, including your spouse's income, even if you are planning on filing alone. Your entire household income is compared to your expenses, and this is how your lawyer will determine if you have enough income to file for Chapter 13.
The Amount You Will Repay
Your income will also affect the amount of money you will be required to repay through your Chapter 13 bankruptcy. When you meet with a bankruptcy attorney, he or she will carefully review your entire financial situation. The details of your finances will help the attorney calculate a proposed plan for the bankruptcy, and this will help determine the following:
When your attorney has this information and files the case with the trustee, the trustee will have to review everything and approve it.
The Way The Plan Works Out
Finally, you should realize that your repayment plan might change along the way, and this can primarily occur when you experience a change in your income. If you suddenly lose your job and take a job that pays less, your payment amount for your case could drop. On the other hand, if you get a raise at your job, your payment amount for the plan might increase.
When you file for Chapter 13, you will be instructed to notify the trustee of any changes that occur. This does not only include changes in income, but it also includes changes in debts.
Chapter 13 offers a way for people to get out of debt, but it is not always the right option for everyone. To find out if you qualify for this or for Chapter 7 bankruptcy, you can contact a bankruptcy lawyer, such as those found at Richard S. Ross - Bankruptcy Attorney, in your city and schedule a consultation appointment.
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