This blog recently discussed Chapter 7 bankruptcy exemptions and their importance to consumers filing for Chapter 7 bankruptcy protection. Because Chapter 7 bankruptcy provides important protections for consumers, it is helpful for struggling consumers to know how to qualify for Chapter 7 bankruptcy.
Chapter 7 bankruptcy is a personal bankruptcy option that allows the filing party to liquidate assets to repay creditors. To qualify for Chapter 7 bankruptcy, the filing party must meet what is referred to as the means test. The means test looks at the average income of the filing party for six months preceding the filing party’s application for bankruptcy. The average monthly income is then compared with the state’s median income.
If the filing party’s income is not greater than their state’s median income, then the party may qualify to file for Chapter 7 bankruptcy protection. Chapter 7 bankruptcy is a personal bankruptcy option that can help filing parties enjoy a fresh financial start. Once the filing party files for bankruptcy, an automatic stay protects them from creditor collection actions while the bankruptcy process proceeds. A debt discharge at the end of the process helps the filing party enjoy debt relief.
There are a variety of requirements associated with filing for Chapter 7 bankruptcy protection which is why it is helpful for those considering bankruptcy protection to be familiar with what they are and how to meet them. Struggling consumers seeking help with the stress of overwhelming debt should be aware of the process of qualifying for personal bankruptcy protection and filing for bankruptcy.