When filing for bankruptcy, most debtors will have two options. You can choose between a Chapter 13 bankruptcy or a Chapter 7. Because you can eliminate qualifying debts in a matter of months, Chapter 7 bankruptcy is the fastest way to file for bankruptcy. Chapter 13 bankruptcy can take up to five years, with several monthly payments.
Chapter 7 bankruptcy protection is only available to those who can demonstrate that they are in need. This would usually mean that your income is lower than the state’s median. You may not be eligible for Chapter 7 bankruptcy if your income exceeds this median. Many people are curious about the possibility of quitting their job to lower their income to file Chapter 7.
The means test examines your income for six months prior to you file bankruptcy. Many people wonder if it is possible to quit their job and suppress their income quickly in order to reach the threshold. Although it is possible to leave your job six months before filing to reach the threshold, there are several disadvantages to this option. Your income will be reduced if you quit your job. If trustees believe that you have filed for bankruptcy in bad faith or manipulated your income, they can contest it. A judge will look into your bankruptcy if you are trying to abuse the process by quitting work. Judges may find that you have been manipulating your income to qualify for Chapter 7 bankruptcy and will convert your bankruptcy to Chapter 13 instead.
Reduced hours can be a sign of financial instability and could also affect your job security.
Working with our team, we will find the best strategy to help you qualify for the right type of bankruptcy for your situation. For more information and advice on bankruptcy, contact us today!
This post was written by Trey Wright, the best local bankruptcy lawyer! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.
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