Filing Chapter 7 Bankruptcy: Do I Qualify?
Anyone who wants to eliminate debt by filing for bankruptcy must first determine if they qualify. There are two types of personal bankruptcies that one can file: chapter 7 and chapter 13.
A chapter 13 bankruptcy is reserved for people who don’t qualify for chapter 7 because their income is too high so they must repay their debts over a period of three to five years.
Chapter 7 bankruptcy is the most sought after type of bankruptcy. People prefer a chapter 7 bankruptcy because they don’t have to repay debts. Chapter 7 bankruptcy eliminates dischargeable debts forever.
There are two important factors that will determine if one qualifies for a chapter 7 bankruptcy;
- You can only file a chapter 7 once every eight years
- Your household income must qualify under what is called the means test.
A means test calculates your average household monthly income over a six-month period based on your household size and the state where you reside.