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What are the requirements for filing for Chapter 7 bankruptcy?

On Behalf of | Jan 4, 2017 | Personal Bankruptcy

It is a brand new year and probably one of the farthest things from Cranberry Township residents’ minds is how to file for personal bankruptcy. It can be hard for an individual to admit that he has fallen on difficult financial times and even more difficult for him to find the courage to take the step toward righting those wrongs through bankruptcy. Though it may not meet the needs of all financially-strapped individuals, Chapter 7 bankruptcy can be a useful tool for those who qualify for its protections.

Chapter 7 bankruptcy is a liquidation process. It involves the selling of a debtor’s assets for the purposes of garnering money to pay off his debtors. Though often a debtor may settle his debts for far less than he originally owed, he also reduces his possession of many assets during the process of Chapter 7 bankruptcy.

In order to file Chapter 7 bankruptcy a debtor must meet several requirements. His income must be less than the median income of the state in which he lives or if his income exceeds that amount then he must prove through a means test that he still needs the Chapter 7 bankruptcy process in order to move his life forward.

The debtor cannot have had debts discharged through Chapter 7 bankruptcy in the prior eight years and may not have had debts discharged through Chapter 13 bankruptcy in the prior six years. Other issues may bar a person from filing for Chapter 7 bankruptcy and readers who wish to pursue this process should speak with their own bankruptcy attorneys to ensure that they will qualify.

Chapter 7 bankruptcy can help a person get back on his feet after amassing too much debt. Though the process can be challenging the outcome of living debt free can make the work of getting through the bankruptcy process completely worth it.