Every type of bankruptcy available to consumers and businesses can help many put debt behind them with the protection of the United States Bankruptcy Courts.  However, what some people are not aware of is that Chapter 7 bankruptcy, unlike other types of bankruptcy, has certain eligibility requirements that must be met.  For those who qualify for Chapter 7 bankruptcy, the process for eliminating debt can be very quick, lasting approximately four to six months, but typically no longer than one year.  This is an attractive method of debt-elimination for individuals who either do not have any assets to sell, or who do not care if their assets are sold to satisfy debt.

How Do I Know if I Qualify for Chapter 7 Bankruptcy?

In order to qualify for Chapter 7 bankruptcy, an individual consumer or business must meet the following income requirements:

  • Have an income that is less than the monthly median income for those with similar households in the debtor’s state of residence; and
  • If your income is not less than the monthly median, you must satisfy the “means test.”

The “means test” provides debtors with a second chance so to speak, so that they still may be able to qualify for Chapter 7 bankruptcy regardless of whether their income is more than the median for the debtor’s particular state.  When income exceeds the median, a debtor’s financial situation is further evaluated by calculating what income is left over after paying necessary monthly expenses.  If there is sufficient disposable income leftover to pay certain creditors (such as credit card companies), a debtor may be eligible for Chapter 7 bankruptcy.  However, it is important to keep in mind that the “means test” is meant to limit Chapter 7 bankruptcy to those debtors who really need it – those that may not otherwise be able to pay off their debt.

What if I Don’t Qualify for Chapter 7? – Additional Options You Should be Aware Of

If you do not qualify for Chapter 7 bankruptcy, all is not lost.  You have a number of other debt-elimination options available to you including, but not limited to, the following:

  • Chapter 13 bankruptcy – this type of “repayment plan” bankruptcy can take approximately four or more years depending on how much debt you have, and what your income is (the more debt you have, the longer the bankruptcy process may take);
  • Debt Settlement – certain debts, such as credit card debt, may be eliminated by a negotiated debt settlement (consumers can do this on their own, but may have a better outcome and/or the process may be smoother with the help of a legal professional); and
  • Debt-Management Programs – for consumers who have mostly credit card debt that will not go away with regular, minimum monthly payments, debt-management programs, also known as credit counseling, provides a way for debtors to lower their monthly credit card payments as well as lower the interest rates associated with those credit cards (it is important to do your research as some credit counseling agencies are more legitimate than others).

Regardless of what type of debt you currently have, and how much you have, speaking with an attorney about these and other debt-elimination options is one of the biggest and most important steps you can take to eliminate your debt and stop creditor harassment and collection activities.

Contact Kansas City Bankruptcy Attorney Douglas Breyfogle Today to Schedule a Free Consultation

When facing debt, you have options available to you that include, but are not limited to, bankruptcy.  Every financial situation needs to be evaluated on an individual basis, and Chapter 7 bankruptcy may be the right choice for some, and not for others.  Given that there are certain requirements that must be met in order to qualify for Chapter 7 bankruptcy, it is important that anyone considering this debt-elimination option discuss the matter with a Kansas City Bankruptcy Attorney as soon as possible.  With more than twenty years of experience providing Kansas City residents with excellent legal representation, Kansas City Bankruptcy Attorney Douglas Breyfogle has the necessary experience, dedication, and advocacy skills to help you overcome your debt in the most reasonable way possible.  Don’t let debt drag you down.  Taking charge of your finances now will help you plan to live debt-free in the future, free from creditor harassment.  To discuss your situation with Douglas Breyfogle, contact our office today by calling (913) 742-8700 to schedule your free consultation.