Are You Eligible for Chapter 7?

Chapter 7 bankruptcy is a popular type of bankruptcy filing because it is possible to eliminate all of your dischargeable debts without having to work through a three-to five-year repayment plan. However, not every debtor will qualify for Chapter 7 bankruptcy. To find out if you meet the eligibility requirements, consider talking to a bankruptcy lawyer about your unique financial situation.

Identifying Prior Bankruptcy Filings

Be sure to tell your bankruptcy lawyer about your past filings, if any. You cannot qualify for a Chapter 7 filing if you’ve received a Chapter 7 discharge within the past eight years or if you’ve had a Chapter 13 case resolved within the past six years. Additionally, under certain circumstances, a previous bankruptcy filing that was dismissed within the past 180 days will disqualify you. This applies if the case was dismissed due to your violation of a court order, your own request for the dismissal after a creditor requested relief from an automatic stay, or the ruling that your case was fraudulent or abusive.

Determining Your Income

Next, your bankruptcy lawyer will determine whether your income exceeds a certain threshold. The threshold is the median income for a family of your size in your state. Your monthly income is calculated from the average income during the past six months. If your income is equal to the median or less than it, then you can file for Chapter 7. If your income exceeds this threshold, then it is subject to further review. Certain monthly expenses will be subtracted from your current monthly income. The resultant figure is your disposable income. If your disposable income exceeds a certain limit, then you are not eligible to file Chapter 7.

The bankruptcy attorneys at Cutler & Associates, Ltd. will determine your eligibility to file Chapter 7 bankruptcy during your complimentary evaluation