Knowing how to qualify for Chapter 7 bankruptcy protection is important for any individual struggling with debt and seeking options to enjoy debt relief. Chapter 7 bankruptcy is a liquidation bankruptcy option that can help protect struggling consumers and relieve them of their debts.
To qualify for Chapter 7 bankruptcy, the filing party must meet certain criteria but a party who does not qualify should keep in mind that other personal bankruptcy options may be available to help. The means test is used to determine if the filing party qualifies for Chapter 7 bankruptcy. As part of the means test, the bankruptcy court looks to the filing party’s average income for the 6 months leading up to the bankruptcy filing. If that income is less than the state’s median income, the filing party may qualify for Chapter 7 bankruptcy.
The court will also look to the filing party’s ability to repay some of their debts, previous bankruptcy history and additional requirements may also be required. A Chapter 7 bankruptcy is a bankruptcy option that allows the filing party to liquidate non-exempt assets to repay creditors. Certain assets are protected through different categories of exemptions. The process, once complete, ends in a debt charge that allows the filing party to enjoy debt relief.
Personal debt can be overwhelming to deal with on a daily basis so it is important for struggling consumers to be familiar with their personal bankruptcy options. Understanding how to qualify, and which option is best for the circumstances of the filing party, are essential first steps along the path to enjoying debt relief.