Bankruptcy is a long and sometimes confusing process. Be informed on how to file, what the qualifictions are, and who is eligible. Do not file bankruptcy without reading this first.
File Bankruptcy (Chapter 13)
While bankruptcy seems like an easy way out for some people there are a lot of things to consider before you file bankruptcy. The process is not always the same and it depends on who is actually filing. If a person or individual files bankruptcy process is completely different than if a business files for bankruptcy. For example, a business cannot even file for Chapter 13 bankruptcy. Instead the business must file a Chapter 11 bankruptcy.
A sole proprietorship must file Chapter 11 also. However, if an individual who owns a sole proprietorship files bankruptcy, they may file under Chapter 13. They would then take on the business related debts which they are personally (and legally) responsible for.
In order to file bankruptcy under Chapter 13, the individual must have a steady earnings or else they will not qualify. A steady income is income that will always occur at regular intervals (daily, weekly, monthly, quarterly, semi-annually, or annually). Your normal salary or hourly wage can fund a Chapter 13 bankruptcy. To get a good idea of what type of steady income qualifies, here are some examples: commissions from sales, disability, unemployment, worker's compensation, self employment, child support, and real estate.
The individual who will file bankruptcy needs to be able to support themselves on this steady income. This has to cover your daily needs and anything that is necessary to survive. The individual must also have some money left over each month. This money is used to pay off the remaining debts they have. This is a lengthy process that can go on for a few years. The amount that must be paid each month is different for each bankruptcy case. The total amount of debt the individual is in will play a large role.
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