While the decision to file for bankruptcy can be incredibly difficult to make, your work is far from over once you do decide. There are some big no-no's that could halt you in your tracks toward making a fresh financial start, and knowing about these issues ahead of time could pay off in making sure that your chapter 7 filing goes as smoothly as possible. When bankruptcy works, it works wonders, so read to learn more about a few possible snags and how to avoid them.
Bankruptcy codes are being amended constantly, and one big recent change concerns how much money filers make. Since bankruptcy should be viewed as a last resort for those who cannot meet their financial obligations, the law sets income limits for filers. The amount of income you can earn and still file for chapter 7 bankruptcy varies by state and is based on your state's median income.
Your Income Exceeds the Median
You should understand that there are some deductions available that could reduce your income enough to file in your state. For example, if you have extraordinarily high medical bills or an exorbitant mortgage payment to make, you may be able to deduct enough from your income to qualify. You can try your hand at a calculator that determines "means", which can give you an idea of what to expect. Your bankruptcy attorney can also assist you in this so called "means test".
You are allowed to file bankruptcy an unlimited number of times, but there are waiting periods to be observed between filings. Your last bankruptcy must be more than 8 years ago from the discharge date to file for chapter 7 again. If your last filing resulted in a dismissal, you can file again after 180 days. Cases can be dismissed for several reasons, such as failure to attend the required financial education classes, submitting false documents when filing, hiding assets and more.
If you have run afoul of the bankruptcy courts in the past, you should know that you may be banned for life from ever filing again, particularly if you have been convicted of bankruptcy fraud. If you are able to show just cause you may be able to appeal the ban, so speak with a bankruptcy attorney for more information.
If you run up against the above issues or any other potential problems filing your chapter 7 bankruptcy, be sure to speak to a chapter 7 bankruptcy lawyer before you give up hope of getting financial relief.