Making the decision to declare Chapter 7 bankruptcy shouldn’t be taken lightly. It requires the complete liquidation of your assets and should only be done as a last resort because you are simply unable to repay your creditors through Chapter 13 or Chapter 11 bankruptcies.
Not everyone qualifies for Chapter 7 either. In fact, there are many requirements that must be met before you can officially declare. Continue reading to learn more about these requirements so you can determine whether Chapter 7 is the right choice for you.
Low Income Level
One of the primary requirements for Chapter 7 bankruptcy is that you have minimal disposable income. Disposable income is the remainder amount of your average monthly earnings after you’ve paid your bills. A means test can determine whether you qualify for Chapter 7 based on your income.
It’s worth noting that you can still have a job to qualify, but in this case, your monthly bills will need to be costly enough to offset your income amount. Additionally, your current debts must not exceed approximately $394,000 in order to be approved for a Chapter 7 bankruptcy.
Mandatory Credit Counseling
Credit counseling is a requirement for any form of bankruptcy. Before you officially file for Chapter 7, you will need to have completed credit counseling through an approved agency within the past 180 days. Due to the serious nature of bankruptcy, credit counseling is required to ensure those considering a Chapter 7 are aware of their options.
Only those who are in active military combat zones or who have a severe physical or mental disability are exempt from completing credit counseling. Once finished, you will be issued a certificate of completion that you’ll include in your Chapter 7 declaration.
Schedule Your Case Review Today
Chapter 7 bankruptcy is often a final option for those struggling to make ends meet. But, in order to qualify, you must attend credit counseling, have debts that don’t exceed the maximum threshold, and your income cannot leave you with excessive disposable income.
If you have further questions about your Chapter 7 bankruptcy, schedule your initial consultation with a knowledgeable Chapter 7 bankruptcy lawyer at Rowdy G. Williams Law Firm today. Start by calling our office at 1-812-232-7400 or by completing the brief contact form located at the bottom of this page.