To determine whether you qualify for Chapter 7 bankruptcy, you may be subject to the means test, which will determine if your income is low enough for you to file a Chapter 7 bankruptcy and liquidate a good part of your debt.
If your income is too high, you may be eligible for a Chapter 13 bankruptcy instead, where you would set up a payment arrangement to repay a portion of your debt.
A Chapter 7 means test doesn’t require that you are without income altogether. You may still qualify even if you earn a significant monthly income if you have a lot of qualifying expenses such as mortgage payments, medical bills, insurance, taxes and others.
It is a matter of taking your average monthly income over six calendar months prior to filing and deducting specific monthly expenses to determine what your disposable income is. If you have very little, odds are you may qualify for a chapter 7 bankruptcy.
If you have questions regarding your eligibility for Chapter 7 bankruptcy or Chapter 13 bankruptcy, contact the Peoria bankruptcy Law Offices of Charles E. Covey for help. Charles offers a free consultation to help you decide if bankruptcy is a good strategy for you and your family.