Qualifying For Chapter 7

Bankruptcy Attorney Dayton, Oh

Filing for bankruptcy is a way to get out from under your debts and regain control over your financial future. Although there are two types of personal bankruptcy cases, some people prefer the debt relief that Chapter 7 bankruptcy can offer. However, not everyone will qualify.

Chapter 7 Criteria

The U.S. Bankruptcy Code has specific guidelines for debtors seeking help under Chapter 7. In order to obtain a debt discharge under Chapter 7, you must meet the following requirements:

Means test– this test evaluates your financial standing against a predetermined formula. Your disposable income (income after monthly expenses) will be measured to determine if you have sufficient income to repay some of your debts. If your disposable income is deemed insufficient you may qualify.

Income criteria– as part of the means test, your monthly income will be compared to the median income level of your state of residence. If your income is less than the median income level of your state, you may qualify for Chapter 7.

Prior filings– if you have filed for bankruptcy in the past, you may not qualify for Chapter 7 unless a specified period of time has elapsed. If you had debts discharged in a prior Chapter 7 case, you will be required to wait at least 8 years before filing again; or wait at least 6 years after a prior Chapter 13 case.

Credit counseling– in order to obtain a discharge you will be required to complete a debtor’s education course through a credit counseling agency. Your Cincinnati bankruptcy lawyer can help you find credit counseling resources, answer questions about the means test and help you determine whether you qualify for Chapter 7.

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