Bankruptcy Myths
Week 2:
Myth: Everyone can file for a chapter 7 Bankruptcy (The form of Bankruptcy that discharges all of your unsecured debt).
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Truth: You must qualify to file for a chapter 7 Bankruptcy through what’s called a “Mean’s Test”. The means test includes your household income. Meaning if you are married, or have someone living with you that contributes substantially to the household, then they’re income will be including, along with yours, in the Means Test calculation.
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Myth: You can file for Bankruptcy as often as you would like.
Truth: There are rules for the filing of Bankruptcies. If you initially filed a Chapter 7 Bankruptcy and received a discharge, you must wait for 8 years from the date of your discharge before you can file another chapter 7 Bankruptcy.
If you initially filed a Chapter 13 Bankruptcy and received a discharge, you must wait for 2 years from the date of your discharge before you can file another chapter 13 Bankruptcy.
If you initially filed a Chapter 7 Bankruptcy and received a discharge, you must wait for 4 years from the date of your discharge before you can file a chapter 13 Bankruptcy.
If you initially filed a Chapter 13 Bankruptcy and received a discharge, you must wait for 6 years from the date of your discharge before you can file a chapter 7 Bankruptcy.
Myth: You can receive an inheritance from a family member during your Bankruptcy and keep it all.
Truth: You must notify your Bankruptcy Trustee of any inheritances during the Bankruptcy process. Depending on the amount of the inheritance, your Bankruptcy Trustee may require you to use some, or all, of that inheritance to pay your creditors.
Please visit us at www.mysmithlegal.com for more information other areas of law. Give Smith Legal Services a call for your consultation at 240-245-0015.
