Chapter 7 Bankruptcy Eligibility - An Easy-to-Follow Test
Filing for Chapter 7 Bankruptcy isn't easy given the new rules in the 2005 BAPCPA.
Prior to filing for bankruptcy under any chapters of the Bankruptcy code, the debtor should vie for eligibility.
A person whose current assets can't keep up with his liabilities can apply for a Chapter 13 or Chapter 7 Bankruptcy.
Many applicants prefer the Chapter 7 petition, owing to the immediate relief it brings, it has several conditions.
First, the debtor should calculate using the means test his average earnings six months before applying for bankruptcy and compare it to the average income of the state.
Chapter 7 Bankruptcy is for individuals with below-average income.
If your income is higher than average, you'll then need to make further computations to see whether you qualify for asset liquidation.
The debtor's expenses will be deducted from his income, and the result is then multiplied by 60.
An applicant with an income of $10,000.
00 or more for a five-year period won't be eligible for filing a Chapter 7 Bankruptcy.
For individuals who earn above average, but can't make the $166.
67 monthly payment of debts, they'll need to do the last part of the test to file for Chapter 7 Bankruptcy.
A monthly income of $100.
00 to $166.
00 is compared to the 25% of the sum of the debt to be paid in five years.
If the result is between $6,000.
00 to $10,000.
00 and is less than 25% of the total debt, this qualifies the debtor for Chapter 7 Bankruptcy.
Otherwise, the debtor has to file under Chapter 13 Bankruptcy.
Hire a lawyer after all computations making you eligible for Chapter 7 is completed.
The lawyer should help you prepare the necessary documents to file for bankruptcy, such as a list of all your creditors, your assets and liabilities, and a list of your liabilities secured by your assets.
When you file everything needed, you're immediately protected by automatic stay.
Prior to filing for bankruptcy under any chapters of the Bankruptcy code, the debtor should vie for eligibility.
A person whose current assets can't keep up with his liabilities can apply for a Chapter 13 or Chapter 7 Bankruptcy.
Many applicants prefer the Chapter 7 petition, owing to the immediate relief it brings, it has several conditions.
First, the debtor should calculate using the means test his average earnings six months before applying for bankruptcy and compare it to the average income of the state.
Chapter 7 Bankruptcy is for individuals with below-average income.
If your income is higher than average, you'll then need to make further computations to see whether you qualify for asset liquidation.
The debtor's expenses will be deducted from his income, and the result is then multiplied by 60.
An applicant with an income of $10,000.
00 or more for a five-year period won't be eligible for filing a Chapter 7 Bankruptcy.
For individuals who earn above average, but can't make the $166.
67 monthly payment of debts, they'll need to do the last part of the test to file for Chapter 7 Bankruptcy.
A monthly income of $100.
00 to $166.
00 is compared to the 25% of the sum of the debt to be paid in five years.
If the result is between $6,000.
00 to $10,000.
00 and is less than 25% of the total debt, this qualifies the debtor for Chapter 7 Bankruptcy.
Otherwise, the debtor has to file under Chapter 13 Bankruptcy.
Hire a lawyer after all computations making you eligible for Chapter 7 is completed.
The lawyer should help you prepare the necessary documents to file for bankruptcy, such as a list of all your creditors, your assets and liabilities, and a list of your liabilities secured by your assets.
When you file everything needed, you're immediately protected by automatic stay.
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