Most people know that Chapter 7 Bankruptcy is a chance to get debt relief – but they don’t know whether or not they qualify, as there are many misconceptions about Chapter 7 Bankruptcy.
Before 2005, virtually anyone could file for Chapter 7 Bankruptcy. Realizing that some were abusing the system, Congress voted to add a “means test.” Now, in order to qualify for Chapter 7, you need to meet one of two criteria:
Household income: Your total household income for the past six months must be below the state median income for a household the same size as yours.
Disposable Income: Any disposable income you have is insufficient to pay creditors a meaningful percentage of the debt owed to them.
As it turns out, most people who are in a serious enough situation to consider filing Chapter 7 bankruptcy, are eligible for Chapter 7. If, for whatever reason you do not qualify for Chapter 7, Chapter 13 bankruptcy may still be a useful option for reducing the burden of unsecured debts.
At The Law Offices of Daniel A. Higson, we can advise you on whether a Chapter 7 Bankruptcy is right for you.
For further information about Chapter 7 Bankruptcy, please schedule a free consultation by calling us at (805) 642-6405.
