Life’s demands can push you into a corner where you find yourself unable to pay all of your debts. At such a point, you might want to file for bankruptcy to get some relief and reorganize your finances.
While it is one of the least favorite alternatives to having your debts discharged, filing for bankruptcy is a complex process and can be costly if you don’t get the right advice. If you live in Philadelphia, you can find a Philadelphia foreclosure lawyer to guide you through the process. There are various ways you can file for bankruptcy, chapter 7 bankruptcy being one of them. Here is what qualifies you to file for this type of bankruptcy.
Passing the Bankruptcy Means Test
If more than half of your debts arise from purchasing consumer products rather than tort debts and business taxes, you will be subjected to this test. This test compares your income on a monthly basis with that of the state’s median family income. If your monthly earnings are more than the state’s median, then you will not qualify for this provision. It means that you have enough money to pay your bills and remain with some leftover to cover your debts.
No Record of Bankruptcy Discharge
This measure helps to prevent irresponsible individuals who would otherwise develop a habit of accumulating debt and then filing for bankruptcy. You are only eligible for chapter 7 bankruptcy if you haven’t filed the same suit in the last eight years. You will also not qualify if in the last six years you’ve had a chapter 13 bankruptcy discharge. These dates are checked from when you first filed for bankruptcy, and not when the debt was discharged.
Individuals, Couples and Small Business Owner
If you are running a limited liability company or a partnership you will not be eligible for chapter 7 bankruptcy. This provision is only available to individuals, married couples, a sole proprietor on which you have some personal debts or a business partnership where the debt has personal liability.
Bankruptcy Dismissals
In some instances, a court may dismiss your bankruptcy file for various reasons. These reasons could be that you made a fraudulent bankruptcy filing, you violated a court order or maybe you abused the bankruptcy process. In such a situation, you will only be eligible for another chapter 7 bankruptcy filing after 180 days has elapsed.
Credit Counselling
Investing in credit counseling 180 days before filing for bankruptcy is a must. This requirement is mandatory not just for chapter 7, but for any other type of bankruptcy filing. You are not obligated to get this counseling immediately before you file, but you must have had it within 180 days prior to filing. The counseling includes taking a two-hour financial management course. There are approved government agencies that provide these services, some at a fee, and some free of charge. You can take your time to find out which you will receive the best counsel.
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