How do I qualify for a Chapter 7 Bankruptcy?

It basically comes down to two things: Income and household size. Once you qualify to file bankruptcy, it really doesn't matter if you just barely meet the income requirements, or you have no income at all. Both debtors would be treated the same by the bankruptcy courts. Keep in mind that household size is not limited to your kids. If you are providing for over half the support for people in your home, then you can use them to help you qualify for bankruptcy. The courts look at your past 6 months of income and take an average. So, if you make $50k a year, but you didn't work 3 of the past 6 months, then for purposes of the chapter 7 bankruptcy, you make $25k a year.

Why would anyone pick a chapter 13 over a chapter 7 bankruptcy?

The first reason is qualification. If you make too much money then you can't file a chapter 7 bankruptcy so you are forced into a 13. The second reason is stripping off your second mortgage. If the value of your home is worth less than you first mortgage, then you can strip off and discharge a second mortgage in a chapter 13 bankruptcy. You can't do that in a chapter 7. The third reason why people file chapter 13s is to save their home when they are behind in payments. If you are current on your mortgage at the time you file your chapter 7, you don't have to worry about losing your home. However, if you are late, your lender can ask the court for permission to foreclose the property, and the judge will probably allow them. In a chapter 13, your attorney take your arrearages and puts them in your repayment plan so you don't lose your home.

Are both spouses required to file for Bankruptcy?

No. If one spouse wants to file bankruptcy, then he or she may do so and the other spouse's credit will not be affected. You will need to report the non filing spouse's income information for qualification purposes.

How do I rebuild credit after Bankruptcy?

You need to get credit immediately after filing your chapter 7 bankruptcy. If you have a car that you are making payments on, then it would be wise to keep it throughout the bankruptcy because it is instant credit. You also want to get other credit right after filing like a credit card, or secured property such as furniture or a lab top. These credit lines will help you rebuild your credit right away.

How am I going to buy a car after Bankruptcy?

Very easily. In fact, many people here in Modesto who can't purchase cars because of bad credit file bankruptcy, and then buy a car after their discharge. It's usually much easier to get financed that way. Most car dealerships can finance a fresh bankruptcy with ease.

How long does the Bankruptcy process take?

Usually about 4 to 6 months. However, once your petition is filed, all you have to do is show up to your trustee hearing and take an online class. That's it. Besides that it's just a waiting game.

Can I keep my home if I file a chapter 7 Bankruptcy?

Yes, as long as you are current.