How do I qualify for bankruptcy?

In order to qualify for a Chapter 7 bankruptcy, we first need to take a look at your income. What we do is we take an average of the last six months of your income and compare that to the median income for someone of your household size in your state. If you do qualify, if you're under the median income, you automatically qualify for a Chapter 7 bankruptcy. If you are over the median income, then we need to do an initial additional analysis called a means test, which is basically a long formula mathematical calculation that takes your income, subtracts allowable expenses, and then we determine whether or not you have any money left over at the end of the month, which is called disposable income. If that formula tells us that you have disposable income left over at the end of the month, then you'll be a candidate for a Chapter 13 bankruptcy, which is basically a reorganization, or a payment plan to your creditors.

Additional Info:

Most clients are qualified for one or the other bankruptcy. If you’ve recently filed for bankruptcy, there are limits as to when you can re-file. A debtor is eligible for a Chapter 7 every eight years for instance. It is possible that someone who is not eligible for a Chapter 7 can still file a Chapter 13 petition particularly when they are not seeking a discharge of debt, but rather seeking the protections of the automatic say to protect against garnishment, seizures or foreclosures of property etc.

Do you need to be a U.S. Citizen to file bankruptcy? No, you don’t have to be a citizen of the United States to file bankruptcy. You do need to be a resident of the place where you plan to file – which is generally where you live or own property. You can temporarily reside elsewhere such as if you travel for work.

You need to have a social security number – or an Individual Tax Number to file for bankruptcy.

There is no minimum debt you need to qualify for bankruptcy. There is no cap on the debt you do have in a Chapter 7, but there are caps in a Chapter 13. Sometimes debt can be disputed or otherwise dealt with to avoid the caps from preventing a good faith and viable Chapter 13.

Some debt is disqualified from discharge, even though you can obtain a discharge for other debt. Debt that is often non-dischargeable include alimony, child support, priority tax obligations, and most student loans.

To determine if you qualify for bankruptcy, we ask that you set a free consultation with us. We can then go over your individual circumstances and make sure that bankruptcy won’t make things worse somehow, and make sure that we pick a plan that best makes sense for you and your family to obtain a fresh start. Freedom from debt is a big relief and with bankruptcy it can occur very quickly – a discharge in a Chapter 7 case occurs in as little as 90 days.

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