An unfortunate myth surrounding bankruptcy is that the benefits of bankruptcy are out of reach for people with low incomes. This idea goes against the very purpose of bankruptcy, which is to help people of all incomes solve their debt woes.
In fact, low-income bankruptcy help is available in several forms, from filing fee waivers to Chapter 7 bankruptcy exemptions.
Learn more about filing bankruptcy with a low income by filling out the form below. You can connect with a local attorney for a free consultation.
Chapter 7 bankruptcy allows people in debt to discharge some or all of their unsecured debts, including credit card bills, medical debt, and some personal loans. Chapter 7 is specifically designed for people with little or no income.
If you're curious about your eligibility for Chapter 7, take a few seconds to understand the Chapter 7 means test, which simply measures your income with your state’s median wage level. A local attorney can also help you determine your eligibility under Chapter 7.
In addition, bankruptcy courts protect important kinds of property owned by low income filers, and state laws often exemptions for the following items from collection by creditors:
Bankruptcy exemptions vary by state, but they are all designed to help people with low-incomes relieve their debts through bankruptcy while causing the least amount of disruption in their everyday lives.
You may also be able to file for Chapter 13 bankruptcy, which offers relief from additional types of debt compared to Chapter 7, and can also be used to halt foreclosure.
Chapter 13 bankruptcy is designed to create a debt repayment plan over a period of three to five years. The plan is based on your disposable income, and may be available to these earning a low wage. An attorney can help you determine if Chapter 13 is an option for your situation.
While the basic structure of Chapter 7 is already designed to help people with low incomes file bankruptcy, there are other bankruptcy features that may provide further assistance to low-income filers.
These helpful bankruptcy features include:
Of course, while there are several ways for low-income people to benefit from bankruptcy, many filers also prefer to consult a local attorney. By taking steps to ensure that the bankruptcy is done right, it may be possible to save money in the long run.
For more information on eliminating debt and obtaining low-income bankruptcy help, contact a local bankruptcy lawyer today.