Posted on: 17 December 2018
When you face loads of debts you cannot repay, you could always turn to bankruptcy for help. There are two options with bankruptcy, but many people prefer Chapter 7, as it is faster and offers forgiveness of qualifying debts. If you are interested in learning more about the requirements for Chapter 7, here are a few of them you should understand.
Your Income Plays a Huge Role in Qualifying
One of the most important aspects of qualifying for Chapter 7 is the amount of money you earn. Your income matters in this, because Chapter 7 is not available for people who make a lot of money. Instead, Chapter 7 is for people who make less money than the average income in the state they live in. Therefore, your attorney will compare your income to the average in the state, and this is the main factor that will help determine if you qualify for Chapter 7.
You should know that your income will consist not only of the money you earn from your job, but it will also consist of other forms of revenue you may have, such as child support payments you receive or lottery winnings you recently received. Your lawyer is likely to add up all forms of income you received over the last six months as a way of comparing your income to the state's average.
The Types of Debts You Have Also Matter
While the types of debts you have may not qualify or disqualify you from using Chapter 7, they should play a role in your decision of whether to file or not. With this branch of bankruptcy, you will receive a discharge of debts if they qualify for a discharge. Debts that qualify typically include credit card balances and personal loans, but there are others too. If you have debts that do not qualify, you will not receive a discharge for them, and you will have to repay them in full. An example of a debt that does not qualify is money you owe for a court-ordered judgment. Another example is alimony you owe.
The Timing of a Prior Bankruptcy
One other factor that could interfere with filing for Chapter 7 is a prior bankruptcy you went through. There are rules about wait periods you must follow when filing a second time, and your lawyer can help you determine if you qualify.
These are the top three factors that will affect your ability to file for Chapter 7 and your decision about filing. If you have questions about bankruptcy, talk to a lawyer who specializes in Chapter 7 bankruptcy filing services.Share