Do I qualify for bankruptcy?
Any person filing for bankruptcy must meet a few basic criteria to be eligible for bankruptcy. Sometimes these requirements can present difficult obstacles to qualifying for bankruptcy protection but actions can be taken to cure these issues.
Qualifying for Chapter 7
To file for Chapter 7, you must meet the following criteria to qualify for bankruptcy:
This part is easy. It’s not like you have to go to school. For about $35, you can take the course over the internet or by telephone. It lasts about an hour or so, and requires putting together a budget and expenses.
You are entitled to a certain amount of income. If you have more income than the threshold, you must complete the means test that permits additional deductions to determine your monthly disposable income. If your income is low enough, you can file Chapter 7. There are ways around the means test, such as business debt and heavy tax debt; if the majority of your debt is “business” related, you get a pass on the means test.
To get a discharge a Chapter 7 to Chapter 7 must wait 8 years. Chapter 13 to Chapter 7 is six years unless in your Chapter 13 you paid 100% or 70% and made something referred to as your “best efforts.”
Qualifying for Chapter 13
To file for Chapter 13, you must do the following:
It’s the same class described above.
A Debtor is barred from Chapter 13 bankruptcy if his or her debt exceeds $1,081,400 in secured debt and/or $360,475 in unsecured debt. If clients exceed these limits, sometimes actions can be taken such as selling a home. Taking any actions like these should be done in consultation with your bankruptcy attorney.
To get a discharge a Chapter 7 to Chapter 13 must wait four years. A Chapter 13 to Chapter 13 must wait two years.
Pingback: Q is for Quicksand, but bankruptcy is a rope | Los Angeles Bankruptcy Blog()