Chapter 7 bankruptcy eliminates unsecured debt such as medical bills, credit card debt, and payday loans. In order to understand whether you qualify is by reviewing your eligibility factors. The most effective way to learn if you qualify includes discussing your situation with an experienced bankruptcy attorney.
Meeting qualifications of the means test and providing proof of completion of credit counseling are a couple of factors to review. There are a number of requirements to meet in order to file and obtain a successful discharge from debt. Yet, many people learn quickly they do qualify and meet such requirements.
- Means Test- This reviews the situation of the debtor regarding assets, debt, household size, and monthly income. The test also gives some insight on possible eligible exemptions.
- State income requirements- Each state has income guidelines for Chapter 7. Also known as the median income level for the state, if your income is below this amount you may qualify to file.
- Complete credit counseling and debtor education courses- Credit counseling is required prior to filing bankruptcy and debtor education should be completed before debt gets discharged. These courses can be completed online or by phone and there are agencies approved by the court to provide each session.
If your income is considered too high you may qualify for a court-approved repayment plan in Chapter 13. When you file your petition proof of completion of credit counseling may be required. If debtor education is not completed before your case is closed, your debt may not be granted a discharge.