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
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.
Where you live can impact the type of bankruptcy you can file. That is because several years ago, Congress determined that in deciding whether a debtor can wipe out their debt entirely or must pay some of the debt back, there should be more focus on a debtor’s income
It should be noted that Chapter 7 and Chapter 13 bankruptcy doesn’t generally discharge Student loan debt, although there are exceptions for Undue Hardship. In addition bankruptcy can impact certain private student loans. Chapter 13 can also be used to hold off on student loan collection during the five year chapter 13 plan.
Undoubtedly the Pandemic hitting just one year after formation had a major impact on the Laundromat. Although both individuals and companies can file a Chapter 7 bankruptcy, there are generally more issues in a Chapter 7. For one, with a business there is often assets to be liquidated. When an individual files bankruptcy, no assets are typically sold because individuals are allowed to exempt (protect) a lot of their assets.
If you are able to file a Chapter 7 to eliminate unsecured debt, then any outstanding utility bills can be included and eliminated as well. Similarly, if you are paying a reduced amount to your unsecured creditors in a Chapter 13, the Utility Companies can be treated the same way.