Deciding If Chapter 7 Bankruptcy Is Right For You

Posted on: 29 June 2016

When you are having financial troubles, you may find yourself facing seemingly insurmountable debts and not knowing what you can do to make your situation better. If this is the case, you may be considering your bankruptcy options. While you may be considering bankruptcy, you may not know exactly what the bankruptcy process entails. Chapter 7 bankruptcy is one of the most common forms of bankruptcy that individuals may file. Get to know some of the facts about chapter 7 bankruptcy so that you can decide whether or not to hire a chapter 7 bankruptcy attorney to get the process started. 

You Must Meet Income Requirements To Qualify

Chapter 7 bankruptcy is a form of bankruptcy that requires you to meet minimum income requirements to qualify. This is because when you are granted chapter 7 bankruptcy, it essentially wipes out or cancels out the eligible debts you owe. In other forms of bankruptcy such as chapter 13, you are still required to pay off the debts owed but do so using a court-ordered payment plant that does not exceed your discretionary income.

To be considered for chapter 7 bankruptcy, you need to pass a means test. This looks at your monthly income and compares it to the median monthly income in your area for the same household size. If you fall below that median income level, you pass the means test. If you do not fall below the median, then you need to go a little deeper to see if you qualify.

The means test also asks a series of questions that determines what your disposable income is. If your disposable income would not cover the monthly payments for a payment plan on your debts and/or your debts far exceed the disposable income you have, you can apply for chapter 7 bankruptcy.

Not All Debts Qualify

It is important to keep in mind that not all of your debts will be eligible for discharge in your chapter 7 bankruptcy. One of the biggest debts not automatically covered by this type of bankruptcy is federal student loan debt. Federal student loans are owned by the federal government and do not automatically get discharged in a bankruptcy situation.

You can have your chapter 7 bankruptcy lawyer petition the court to discharge those loans as well, arguing that the loans place an undue burden on your finances. However, this is difficult to attain due to the wide variety of payment plans available for federal student loans. As such, if you decide to file for chapter 7 bankruptcy, make sure that you contact your student loan company and set up a payment arrangement to keep your student loans from falling into default.

Now that you know a bit more about chapter 7 bankruptcy, you can determine if this is the right course of action for you. If it is, the next step is to hire a bankruptcy lawyer to help you file the paperwork and get your case started.     


Child Support Enforcement Secrets: What You Should Know

If your ex was ordered to pay child support as part of your divorce settlement, you have every reason to expect it to be paid on time. If he or she isn't meeting that obligation in a timely manner, you do have some enforcement options. Instead of struggling to get by or finding yourself fighting with your ex about getting the payments you're entitled to, you should reach out to a child support attorney who can help you take the case back to court. Your ex will have to show just cause for why he or she isn't paying or the courts will order them to catch up. I created this site to share what I've learned about child support enforcement over the years. I hope it helps you to understand your rights and the options available to you.

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