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Make sure you're eligible before filing for bankruptcy

Whether you are facing personal financial problems or serving in a business capacity for a Wisconsin company you own, you may wind up facing additional problems if you neglect to seek clarification of state laws regarding such matters as they apply. For instance, when filing for bankruptcy, you want to make sure you are eligible and that the situation warrants it.  

It's never a good idea to assume that bankruptcy is a viable option for your situation, and you should not proceed without first obtaining all necessary information regarding the process. Especially when actions impact a business, you always want to protect your bottom line if possible and pursue solutions that best fit your needs and goals. This is why reaching out for experienced guidance when financial crisis hits is wise.  

Factors to consider 

Most Wisconsin residents can relate to the ups and downs of the economy. In fact, you're less likely to sail through life without ever facing financial crisis than to hit a few bumps in the road along the way. It's more a matter of knowing where to seek support and to determine the best solutions than wasting time worrying over whether financial setbacks might come your way. The following information explains the bankruptcy means test and other issues concerning eligibility

  • The means test typically serves as a tool to determine if you qualify bankruptcy.
  • Depending on your circumstances, you may qualify for one type of bankruptcy but not another or may, in fact, qualify for more than one type. 
  • The means test is a standardized way of determining whether you meet the criteria for bankruptcy debt relief under Chapter 7.
  • If you are a disabled U.S. military veteran who incurred debt while serving on active duty or a homeland defense assignment, you are exempt from having to take a means test.
  • As a disabled veteran, you may file for Chapter 7 bankruptcy regardless of your expenses or income. 
  • The means test takes your average six months' income and compares it to your state's median family income for the same amount of time. 
  • If your income calculates the same or under your state's average family income, you can petition the court for Chapter 7 bankruptcy. 
  • Passing the means test merely means you are eligible; however, it doesn't necessarily mean Chapter 7 is your best option.
  • If you have enough income to payback debts through an alternative payment plan, the court may decide to convert your bankruptcy from Chapter 7 to Chapter 13.  

It's critical that you understand all sources that count as income. For instance, if you receive state disability insurance payments, this constitutes a source of income. It's always better to discuss the matter with someone well versed in bankruptcy law than to make assumptions or proceed without experienced guidance. 

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