Do I Qualify for Chapter 7 Bankruptcy?
For individuals who are struggling with personal debt, such as credit card or medical debt, there are generally two bankruptcy options: Chapter 7 and Chapter 13. Each has unique demands for the bankrupt individual and unique benefits. Although many consider Chapter 13 to be the less austere because you may keep unlimited assets, you might be in a situation in which Chapter 13 is less helpful to you than Chapter 7 bankruptcy. Whether this is the case for you depends on multiple factors, such as the reason behind your debt and your income to debt ratio.
Chapter 7 bankruptcy is only available to individuals or businesses in certain financial situations. To qualify for Chapter 7 bankruptcy, an individual with mostly consumer debt must pass the Means Test. Before moving forward with the Means Test or any other bankruptcy-related process, speak with an experienced bankruptcy attorney.
Passing the Chapter 7 Means Test to Qualify for Chapter 7 Bankruptcy
The Chapter 7 means test starts with one simple question: do you make less money each year than the median annual income for a household of your size in your state? If the answer is yes, you pass the test and you may file for Chapter 7 bankruptcy.
If you earn more than the annual median income for Florida, you may still qualify for Chapter 7 bankruptcy. But in order to do so, you must determine the amount of disposable income you have after paying your household expenses each month. If this amount is above a specific amount, which your lawyer can help you determine, you do not qualify for Chapter 7 bankruptcy. You may qualify for Chapter 7 bankruptcy even with higher income if most of your debts are not “consumer debts.” For example, if most of your debt is income tax debt – you do not need to pass the means test to file a Chapter 7. If this is the case for you, consider filing for Chapter 13 bankruptcy or exploring alternative options with your lawyer.
Even If you Qualify, Chapter 7 Might Not be Right for You
Working with a bankruptcy attorney will ensure that you are aware of all of your options, and that you choose the Chapter that is best for your situation. Even if you qualify for Chapter 7 bankruptcy, Chapter 13 bankruptcy may be better for you. For example, you can catch up your mortgage or back taxes in a Chapter 13 bankruptcy. You may eliminate an underwater second mortgage or equity line in a Chapter 13 bankruptcy.
Work with an Orlando Bankruptcy Attorney
If you are facing an insurmountable debt load, consider filing for bankruptcy with the aid of an experienced bankruptcy attorney in Orlando. Do not wait to set up your legal consultation with the attorneys at the law office of Goodblatt · Leo to discuss the specific details of your case and determine your options. During this consultation, you might find out that bankruptcy is not the right choice for you. You might also find that you are an ideal candidate for bankruptcy and learn more about how to proceed with seeking the bankruptcy section that will help you the most.