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How to qualify for Chapter 7 bankruptcy

| Jul 2, 2014 | Chapter 7 |

This week we have been discussing topics relating to Chapter 7 bankruptcy. In the first post, we discussed how national credit card debt has reached the highest level since before the economic recession, which could result in a spike in Chapter 7 bankruptcy filings.

In the previous post, we discussed how credit card debt is just one type of unsecured debt that can be forgiven in Chapter 7 bankruptcy, with other types including medical bills, utility bills, back rent and uninsured car accident judgments.

In today’s post, we are going to give a brief overview on how to qualify for a Chapter 7 bankruptcy.

In 2005, the bankruptcy laws were reformed, which made qualifying for Chapter 7 bankruptcy a little more difficult. However, the good news is that it is still a very viable option for many Wisconsin residents who are in over their heads with debt.

Under the new laws, a person must qualify for Chapter 7 bankruptcy under a “means test.” Ultimately, the test determines whether the person has enough income to survive financially after paying back a percentage of his or her debt.

The purpose of the means test is to reserve Chapter 7 for people who really cannot afford to pay back their debts. If the means test determines that an individual can pay some of his or her debts and still survive financially, then Chapter 7 will not be an option but Chapter 13 might be.

An experienced bankruptcy lawyer in your area can provide you with more information on the means test and qualifying for Chapter 7 bankruptcy, as well as alternatives to Chapter 7 such as Chapter 13 bankruptcy and other non-bankruptcy alternatives.

For more information, please visit our Milwaukee Bankruptcy Means Test Attorney page.

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