If you are in a difficult financial situation, dealing with significant debt, chapter 7 bankruptcy protection may offer a way out so that you can get a fresh financial start. Although, you may be required to surrender certain nonexempt property, which is then liquidated to repay the debts you owe, Chapter 7 bankruptcy will allow you to discharge unsecured debt such as credit cards or medical bills so you are no longer required to pay them.
To qualify for chapter 7 bankruptcy protection, you are required to meet certain requirements, referred to as the chapter 7 means test. The means test will take into account your average monthly income from all sources over the last 6 months, which is then compared to other median income in your state for the number of people in your household. If you’re household income is less than the median income, you will likely qualify for chapter 7 bankruptcy,
If you do not qualify after evaluating your income, you will complete the second part of the means test witch takes into account applicable expenses to determine your month disposable income. Deductions such as food, clothing, healthcare, mortgage or rent, utilities, a car loan, child support, and other deductions will be subtracted from your income to determine your disposable income. If your total disposable income is beneath the threshold, you may qualify for chapter 7 bankruptcy. Even if you are above the threshold, you may still qualify if your debt is high compared to the disposable income you have to work with or if there are special circumstances resulting in expenses that require adjustments to your monthly income.
The best place to start is by contacting an experienced chapter 7 bankruptcy attorney to evaluate your situation to determine if bankruptcy protection is a good strategy for your difficult financial situation. All your bankruptcy questions can be answered by calling Peoria Illinois bankruptcy attorney Charles E. Covey at 309-674-8125 or use our online form to schedule a meeting.