There are two forms of consumer bankruptcy: Chapter 7 and Chapter 13. If you are overwhelmed by debt, you may want to move ahead with the bankruptcy process but remain unsure of which type of bankruptcy you should file.
Unlike Chapter 13 bankruptcy, where you enter a court-ordered repayment plan that lasts several years, you must meet certain requirements to qualify for Chapter 7 bankruptcy:
- Over the past six months, your average monthly income must be lower than the median income for same-sized households in your state. If you do not qualify through this threshold, you must pass a means test.
- You cannot have filed Chapter 7 bankruptcy in the past eight years or Chapter 13 bankruptcy in the last six years.
- If you attempted to file bankruptcy, either Chapter 7 or Chapter 13, but your case did not proceed, you must wait an additional 181 days before filing.
If you meet these requirements, you must complete an individual or credit counseling course through an approved credit counseling agency 180 days before you file for Chapter 7 bankruptcy.
Filing for Chapter 7 bankruptcy is a major financial decision that can affect your credit and finances for several years to come. Before you move forward with filing, come and talk to us at Bennett Guthrie PLLC. We can help you determine if you qualify for Chapter 7 bankruptcy and help you understand what next steps to take.