Bankruptcy Lawyer New London, CT
As a bankruptcy lawyer in New London, CT from Eric Lindh Foster Law, LLC knows, those who find themselves in a financial bind may realize that filing for bankruptcy is a necessary step to relieve unmanageable debt and protect themselves from foreclosure. There are a few types of bankruptcy, so knowing your options will help you make a more informed decision.
Chapter 7 is the most common type of bankruptcy, as it is the simplest and fastest process compared to other chapters. A chapter 7 case is suited for individuals or business entities that want to eliminate the majority of their debt by liquidating any non-exempt assets. Typically, all unsecured debt (or debt without collateral) can be forgiven, but you risk the loss of property.
To determine eligibility, check if your monthly income is less than the median in your state. If it is, you can file. If it’s not, your eligibility becomes dependent on your debt-to-income ratio and your disposable income. Chapter 7 is designed for those who cannot afford their debt, so it’s possible for you to qualify if you have a high monthly income with little to no disposable income.
Chapter 13 bankruptcy involves implementing a repayment plan. All foreclosure proceedings are paused, and some of your debt payments are renegotiated based on your monthly income. This chapter is beneficial for those who still have a source of income and don’t want to lose their assets. It also tends to make debt more manageable, as your debts will be consolidated into one three- or five-year loan that your bankruptcy representative will distribute to your creditors appropriately.
To be eligible, you must have at least four years of tax returns, be employed, and have enough income to handle the new monthly payments. There is also a debt cap. Your unsecured debt must be less than $394,725 and your secured debt must be less than $1,184,200. Additionally, you can only file as an individual. If you’re a business owner, your business will still be included in your financial records, but you cannot file in the name of the business.
A CT bankruptcy lawyer in New London knows there is no one size fit all when it comes to bankruptcy. There are various other chapters, each with specific benefits and eligibility requirements. If you are a family farmer, a municipality, or a group that spans multiple counties, look into other chapters that may be better suited for you.
You have the option of filing without an attorney. However, because of the long-term legal and financial repercussions of filing for bankruptcy, it is strongly advised that you seek seasoned guidance. If you’re thinking about filing, protect yourself from making costly mistakes, and call a Conneticut bankruptcy lawyer in New London from Eric Lindh Foster Law, LLC today.