Falling behind on your debts, such as credit card payments, can leave you struggling to make ends meet. If you’ve fallen behind on your payments and you’ve been threatened with legal action, such as garnishing your wages or attaching a lien to your house, you may think bankruptcy is your best course of action. However, bankruptcy laws are complicated and they may not always be to your advantage.
Filing for Bankruptcy
Before you take any action on a bankruptcy, you need to consult with bankruptcy lawyers in Grand Forks, ND. Although bankruptcy hearings are held in federal court, because they are governed by federal law, there are specific state exemptions about how much you will need to repay creditors under a Chapter 13 bankruptcy. If you want to take out a Chapter 7 bankruptcy, an attorney can explain the “means test” that determines if you qualify to file a Chapter 7.
Chapter 7 Means Test
The means test compares your income to the median income of families your size in the state. If you’re single, the median income in North Dakota is $48,402 as of 2015. So if your income is less than the median, you would qualify to file a Chapter 7 bankruptcy. Even if it is above the median, bankruptcy lawyers may still be able to show you qualify to file a Chapter 7.
If you have to file a Chapter 13 bankruptcy, your bankruptcy lawyers can help you come up with a repayment plan you can afford. You may have three to five years to repay the debtors the court says you still owe. If you need help with filing a bankruptcy, contact Kraus-Parr Law PLLC for more information.
A bankruptcy doesn’t necessarily mean you’re debt free, but you may be able to greatly reduce some of what you owe.
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