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Bankruptcy Attorney Washington DC, Maryland, Virginia

Discover Important Bankruptcy Facts You Need to Know

Everyone agrees that bankruptcy is scary. Yet, when the bills start to become too much to handle, it is very often a necessary activity. One often has a helpless feeling as they are flooded with collection calls and letters. Regardless, for many, bankruptcy does provide a solution. Nevertheless, despite the benefits, there are some drawbacks. Today’s article provides some fast but important bankruptcy facts you need to know.

How often can I file for bankruptcy?

Recently, a past client came to our offices asking, “How often can I file for bankruptcy?” Some may find this surprising. We may not see it on Wall Street, but the U.S. economy has struggled for a long time. So, it is not uncommon for a person to go through cycles of doing well, only to have their rug pulled from under them. While at one time multiple bankruptcies in a lifetime were unheard of, today it is not surprising. Nevertheless, the law does place some limits on filing multiple bankruptcies.

What Is a Bankruptcy Means Test?

Do you want to completely wipe out your debt? When many people think of bankruptcy, they believe it as a way of completely erasing their debt. However, for the most part, bankruptcy provides two pathways. There is the liquidation of debt under Chapter 7, but there is also a court-supervised debt repayment plan with Chapter 13. At one time, a person could simply choose which path they wanted to take. Since 2005, bankruptcy law demands that many who can repay their debt file a Chapter 13, instead of a Chapter 7. This change spawned the creation of the means test.