Filing Bankruptcy In Valley Falls, RI - How it Works
If you've decided to file for bankruptcy, the following ten steps will guide you from the beginning to the end of the process:
- Learn the Basics of Bankruptcy
- Find Out If You Qualify for Bankruptcy
- Complete a Credit Counseling Class
- Fill Out Bankruptcy Paperwork
- File Your Petition in Bankruptcy Court
- Attend a Creditors Meeting (341 Hearing)
- File Motions, Objections, or Responses
- Complete a “Personal Financial Management” Class
- Get Your Debts Discharged
- Get on With Your Life
Bankruptcy is a legal proceeding created to give people a fresh start after financial disasters. If you've explored your alternatives and can't see a way out from under your debt, bankruptcy may be the right solution for you.
There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13. Chapter 7 can wipe out most of your debts in a matter of months in exchange for giving up all of your property that the bankruptcy law does not protect. (Protected property is called your “exempt” property.)
Chapter 13 takes three to five years. During that time, you repay some or all of your debts under a payment plan approved by the bankruptcy court. It’s often used by people who are behind on mortgage payments and want to use Chapter 13 to catch up. Most folks who file for bankruptcy prefer to file for Chapter 7 if they qualify, because you can get out from under lots of debt in a matter of a few months.
Step 2. Find Out If You Qualify for Bankruptcy
To qualify for Chapter 7 bankruptcy, you must show that you don’t have enough income to repay your creditors a reasonable amount. You can do this by:
- proving that your income is below the Rhode Island median income for your household size, or
- comparing your income to expenses under a complex formula called the bankruptcy means test to show that you can’t pay.
If your income is above the median income for your state and family size and the means test shows you have enough disposable income to make reasonable payments to your creditors, you may still qualify to file under Chapter 13. To qualify for chapter 13, your debt must be under the limit set by the bankruptcy code and you must be current on your tax filings for the last four years.
To take the means test, you can use our free means test calculator.