However, the typical adult considering bankruptcy is an otherwise responsible individual whose finances have shifted. Successful professionals who earn competitive salaries are among those with the highest levels of revolving credit card debt in the United States and, therefore, are among those most likely to file for bankruptcy.
the court wants to see if the person filing bankruptcy has the means to pay something back to the creditors. To do this, the court compares the debtors income to the average income of a family the same size as the debtor that lives in the same state as the debtor
While filing a bankruptcy generally requires that you provide your attorney a lot of infomation regarding assets, liabilities, income and expenses along with doscuments like paystubs, bank statements and tax returns, and that you complete a credit counseling course that takes approximately one hour, it is still possible to file a Chapter 13 to stop the sheriff sale by filing an emergency (skeleton) petition and schedules.
Some people will file for Chapter 13 bankruptcy because their income is too high to qualify for Chapter 7 proceedings or because they have valuable property that they don’t want to risk losing in the bankruptcy process. Chapter 13 Bankruptcy does not require the liquidation of your personal property but will instead necessitate a repayment plan.
With Chapter 7 bankruptcy, the goal is to eliminate the debt. Typically, the person filing does not lose any assets. Occasionally someone will file knowing they will lose an asset but decides to file anyway because of the amount of debt they owe and they cannot afford to pay the equivalent value of that asset in a chapter 13.
Chapter 13 is an extremely helpful way to protect assets such as save your home from foreclosure by paying mortgage arrears over time, reducing what is owed on a car and reducing debt in general, among other things.