While Chapter 7 bankruptcy can be an effective debt-relief solution, it is only available for those who qualify. To determine whether or not you are eligible, you will often need to rely on something called the means test. Essentially, this test is designed to ensure that those who use Chapter 7 bankruptcy are people who truly cannot pay their debts.
How Does This Test Work?
The test will look to determine your monthly disposable income. First, you will need to calculate your “current monthly income,” which is actually the average income you’ve received in the six months prior to filing for bankruptcy. You will then compare this to the median monthly income for similarly sized households in your state. If you earn less than that amount, you will qualify for Chapter 7.
If you earn more than your state’s median monthly income, you may still qualify based on your monthly “allowed” expenses. These calculations can get highly complex, so it’s best to consult with a Brevard County bankruptcy attorney to discuss your unique situation and the options available to you.
What If I Don’t Qualify?
While Chapter 7 is more aggressive in the way it discharges debts, Chapter 13 bankruptcy is a great option for those who do not pass the means test. In Chapter 13 bankruptcy, your debt will be reorganized into an affordable payment plan, allowing you to clear your debt over time. In many cases, at least a small portion of debts will be discharged in Chapter 13, as well.
Call Our Brevard County Bankruptcy Lawyers Today
For those who are feeling trapped and overwhelmed by copious amounts of debt, bankruptcy can be an effective way to take back control of your life and finances. At the Buchalter Law Group, our skilled attorneys are highly experienced with both Chapter 7 and Chapter 13 cases. When you retain our firm, you can expect dedicated representation designed to achieve the best possible results on your behalf.
Seeking relief from debt? Call (321) 320-6088 to learn how we can help.