Chapter 7 Bankruptcy Guide
Chapter 7 bankruptcy cases are some of the most common forms of personal bankruptcy filings. Unlike Chapter 13, they do not require the filing of a repayment plan. This form of bankruptcy is also called “straight bankruptcy” or “liquidation bankruptcy,” but it’s not quite as cut and dried as it may appear. There are requirements to meet to fill Chapter 7 including qualifying through a means test. Find out if you’re eligible for a Chapter 7, the forms you’ll need to file, and more about the process in this article.
The Means Test
There are requirements to meet to qualify for Chapter 7 bankruptcy. An individual must meet what is called the Means Test. This test was designed to prevent individuals from abusing Chapter 7 bankruptcy. It compares your current income with the median income in your state. Generally speaking, those with a higher amount of disposable income are at a greater risk of failing the means test. Why? Because Chapter 7 bankruptcy wipes out most unsecured debts such as credit card debt, personal loans, and medical bills. If you have plenty of disposable income left over, you’ll likely need to repay creditors through Chapter 13. However, you don’t need to be destitute to file Chapter 7 and it’s important to pursue all options with the help of a qualified attorney.
Other Eligibility Requirements
There are some other qualifications to be aware of. You may not be eligible to file if you’ve had a recent bankruptcy discharge. You’ll also be ineligible if you’ve had a bankruptcy dismissal in the last 180 days. You must also agree to receive credit counseling from a government-approved credit counseling agency. This must be completed 180 days prior to your bankruptcy discharge.
As you may have guessed, there are a number of fees to pay and forms to file. You can view the official list of forms on the United States Courts website.
While it is possible to file for bankruptcy on your own, it’s not recommended by the United States Courts. The results will have a long-term impact on your livelihood and life. Make sure you’re in good hands by reaching out to Akman & Associates, LLC. Our attorneys have countless hours of experience in bankruptcy law and can help you move forward.