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.
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
Your lawyer can 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.
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.
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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. 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
Your lawyer will guide you through the entire bankruptcy process and explain which debts will be discharged, how your personal credit will be affected, and how you can optimize your opportunity to start over with a clean financial slate.
Get Prepared to File Chapter 7 Bankruptcy
Speak to a member of our team right away to start relieving your financial burden. Our team represents individuals and small business owners in Chapter 7 and Chapter 13 bankruptcy cases. We can also represent men and women who might benefit from Chapter 11 reorganization bankruptcy, as well as Chapter 12 bankruptcy for family farmers. Call Farmer & Morris Law, PLLC at (828) 286-3866 or contact bankruptcy lawyer to speak to a member of our team and start making plans to restore your finances today.