If you find yourself needing to file bankruptcy and you don’t qualify for a chapter 7 under the means test, you still have debt relief options. There are a few options available depending on your overall situation. If you simply have unsecured credit card debt and you have not received a summons you might want to consider a debt settlement program or look into a chapter 13 bankruptcy and see if you can afford the payments.
Chapter 13 for Homeowners
If there is a home involved and you are trying to avoid foreclosure then chapter 13 bankruptcy is probably your only solution. As bankruptcy attorneys we see a variety of situations where our clients can’t qualify for a chapter 7 and need to consider other viable options.
If you have a few credit cards with high balances and want to avoid bankruptcy all together a bankruptcy attorney may be able to negotiate a cash settlement if you have some money saved up to offer the creditors. This form of debt settlement can work well for someone who wants to avoid filing a chapter 13 bankruptcy if they don’t qualify for chapter 7.
Getting Around the Means Test for Recent Income Changes
In California we see a lot of consumers trying to squeeze into chapter 7 bankruptcies because their income level is so high. A good bankruptcy attorney is sort of like a good CPA. Bankruptcy attorneys can assist you with bankruptcy pre-planning and help you qualify for a chapter 7.
For example: If your income level over the past 6 months is too high to qualify you under the “means test”, and you recently suffered a loss of income then with pre-petition planning and creditor defense you can wait a few months and qualify for a chapter 7 bankruptcy.
Dealing with Creditor Harassment and Legal Issues
It’s best to consult a bankruptcy attorney right away if you are seeking debt relief to avoid judgments, liens, bank levies and wage garnishments. Typically, your bankruptcy attorney can help fend off creditors that are harassing or trying to intimidate you into paying them. This can be the difference of being able to delay filing bankruptcy until you can qualify for a chapter 7, rather than being forced into a repayment plan to avoid repossession or wage garnishment.
If you don’t think you qualify for a chapter 7 based solely on your income level you then filing chapter 13 bankruptcy isn’t the end of the road especially if you’re a home owner and want to retain possession of your home.
Negotiating with Mortgage Lenders
Yes, there’s a possibility a bankruptcy attorney can still negotiate with your lender to modify your loan in a chapter 7 bankruptcy but there’s no guarantee they won’t foreclose anyway. The truth is, if you don’t qualify for chapter 7 then a chapter 13 or debt settlement program might be your only option. If you need to file bankruptcy and don’t feel you qualify for chapter 7 it’s not the end of the road! The bankruptcy attorneys at the Law Offices of Zhou & Chini will offer you a free consultation to see if you can squeeze into a chapter 7 with some pre-planning or another form of debt settlement. Call us today for a free consultation at (800) 972-9600.