Most debtors will be faced with two bankruptcy options when they choose to file. Generally you can choose a chapter 13 or Chapter 7 bankruptcy. Chapter 7 is one of the fastest ways to file for bankruptcy because you can wipe out your qualifying debts within just a few months of starting the process. Chapter 13 bankruptcy can sometimes take between 3 to 5 years; with many monthly payments along the way.
Chapter 7 bankruptcy protection requires a demonstration of need. Typically this would suggest that you have an income that is below the median for the state. If your income is over this median, it’s likely that you may not qualify for Chapter 7 bankruptcy. A strategy that many people ask about is the option of quitting their job and working to reduce their income in order to file Chapter 7.
Why You Should Quit Your Job to Satisfy The Means Test
A means test will look at your income in a time period of six months before you file for bankruptcy. Many people ask if they could just quit their job in order to suppress income quickly and reach the threshold. It is possible to quit your job six months before you attempt to file in order to meet the threshold but there are many disadvantages to choosing this option. Quitting your job reduces the amount of income you have to put towards your debt. Trustees can also contest your bankruptcy if they believe you have filed or manipulated your income in bad faith. Abusing the process by quitting your job is something that a judge would look at to contest your bankruptcy. A judge may see that you have manipulated your income in order to achieve the qualifications for Chapter 7 and convert your bankruptcy to a chapter 13 instead.
Cutting your hours to reduce your income can also compromise your job security and be seen as a red flag in your bankruptcy.
Finding Improved Strategies
By working with our team we can find a strategy that will help you find a better approach to qualify for the ideal bankruptcy type for your situation. Contact us today for bankruptcy advice and information!
This post was written by Trey Wright, one of the best bankruptcy lawyers in Tallahassee! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.
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