You do not have to be in a specific amount of debt to file Chapter 7 bankruptcy. Your income might play a role in your ability to file for Chapter 7 bankruptcy protection, and you might be required to complete a “means test” to determine your eligibility.
In This Article
Determine Your Eligibility to File Chapter 7 Bankruptcy
When you are drowning in more debt than you can repay and you’re asking yourself, “How much do you have to be in debt to file Chapter 7?”, you might consider filing for the bankruptcy protection the law provides. Chapter 7 bankruptcy can offer you the debt relief you need if you have accumulated more debt from your creditors than you can pay back.
The following criteria can help you determine if you are eligible to file Chapter 7 bankruptcy. You may qualify if:
- You are an individual citizen, business owner, or corporation
- You have not had a bankruptcy discharge in the previous six to eight years
- You have received court-approved credit counseling within the previous six months
You should always consult a lawyer to help you determine your eligibility to file Chapter 7 bankruptcy and guide you through the bankruptcy filing process and procedures. They can also help you understand the benefits of Chapter 7 debt relief.
Another important question to ask is do I qualify for bankruptcy chapter 7.
The Benefits of Chapter 7 Bankruptcy
Many people are hesitant to seek bankruptcy protection because they are afraid of losing their personal property and possessions. Filing Chapter 7 bankruptcy can allow you to discharge rather than decrease your existing debt load. Additional benefits of Chapter 7 bankruptcy include:
- The large majority of people who file Chapter 7 bankruptcy are able to retain all of their personal assets, like their home and car.
- Many people filing Chapter 7 bankruptcy do not have nonexempt assets, which means all qualifying debts will be discharged, and you do not have to create or commit to a debt repayment plan.
- Most, if not all, debt collection activity must stop when your petition for bankruptcy is filed.
Another important benefit of filing for Chapter 7 bankruptcy is the peace of mind it brings its filers. For most people, qualifying for Chapter 7 is a way to achieve a fresh financial start. With the help of a lawyer in your area, Chapter 7 bankruptcy is a simple way to achieve that goal.
Understand the Filing Process for Chapter 7 Bankruptcy
When you are ready to remove the burden of debt from your shoulders, your lawyer will explain the bankruptcy filing process and court procedures. You will start by filing a petition for bankruptcy, which will stop debt collection action against you as soon as your creditors are informed of your filing. Additional paperwork and documentation you must provide will include:
- A complete list of your assets
- A complete list of your debts, creditors, and amounts owed
- A thorough income statement
- Copies of tax records and filings
- Proof of recent and approved credit counseling
After the proper documentation is prepared, your case will be filed with the courts.. Your creditors will be informed that you are filing for Chapter 7 bankruptcy and a case trustee will meet with you and your attorney to evaluate your current financial situation. You may think how much debt do you need to file bankruptcy and which of the following can not be discharged by filing bankruptcy? Once your case is discharged in Chapter 7 bankruptcy, you are legally free from all discharged debts.
Having Your Debts Discharged in Bankruptcy
When your debt is discharged by filing bankruptcy, your creditors can no longer pursue repayment of those debts in court or by having your wages garnished. The vast majority—as much as 99%—of people who file Chapter 7 bankruptcy have their debts completely discharged and are under no obligation to repay their creditors. Debts you might still have to repay can include:
- Spousal support
- Child support
- Certain tax debts
- Debts owed to the government
- Debts accrued by criminal activity
When you declare bankruptcy, you will file a petition in federal court. Once your petition for bankruptcy is filed, your creditors will be informed and must stop pursuing any debt you owe. What Is the Difference Between Chapter 13 and Chapter 7 Bankruptcy?
If your personal or business debt is overwhelming and you are considering filing for bankruptcy, it is important to understand the different bankruptcy filing options you have available. What Is the Downside of Filing For Bankruptcy?
Filing for bankruptcy protection is considered a statement on your ability to repay your debt to your creditors. The fact that you sought and received bankruptcy protection will remain on your credit record for as long as 10 years. What Will I Lose If I File Bankruptcy?
Most people who file bankruptcy are able to keep all of their assets. Filing for bankruptcy may seem like an overwhelming experience. However, a lawyer from our firm can help you through the process. What Is the Process of Filing Bankruptcy?
The process of filing bankruptcy begins with deciding which type of bankruptcy is right for you. You will then need to compile important financial documents, submit a petition to your local bankruptcy How Long Does It Take to Do a Chapter 7 Bankruptcy?
How long does it take to file Chapter 7? A Chapter 7 bankruptcy can take four to six months to do, from the time you file to when you receive a final discharge – meaning you no longer have to repay
Always consult an attorney before engaging in a Chapter 7 Bankruptcy to help determine chapter 7 eligibility.