Do I Qualify for Chapter 7 Bankruptcy?

Qualifying for Chapter 7: What to Expect

If you’re struggling with overwhelming debt, Chapter 7 bankruptcy can offer a fresh start and a path towards financial stability. But you may be wondering, “Do I qualify for Chapter 7 bankruptcy?” 

Qualifying for Chapter 7 involves specific eligibility criteria written into the law. So here are some key factors that determine whether you qualify, and what to do if you have questions. 

Understanding Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a straightforward path to debt relief for people with limited income and significant debt burdens.

This type of bankruptcy comes with unique benefits. It has the power to wipe away unsecured debts, like credit card bills and medical expenses, so you can start fresh. It also stops creditors from contacting you or taking your belongings. And it gives you time to figure out your finances and get a better handle on your budget.

In fact, we’re such fans of this type of bankruptcy that we wrote a free report about it called The Power of Chapter 7 Bankruptcy.

However, not everyone who wants Chapter 7 will qualify. And not everyone who thinks they need Chapter 7 actually does. So it’s important to know how the law and your legal team make that determination.

Means Test to Know if You Qualify for Chapter 7 Bankruptcy

The means test assesses your income level compared to the median income in your state.

If your income falls below the state median, you automatically qualify for Chapter 7. If your income exceeds the median, your attorney would need to look more at your disposable income and expenses. 

These numbers can change year to year and also depend on the type of expenses you have. That’s because while factoring your means, the courts will allow certain expenses to be deducted from your monthly income.

If your disposable income falls below a certain threshold set by law, you may still qualify for Chapter 7.

While this sounds complicated, in reality it doesn’t take long to figure out with an attorney’s help. That’s why our Memphis bankruptcy firm offers a free consultation. We can look at your specific situation and let you know whether you qualify and why.

Your Own Goals

Sometimes people will come to our office certain they want a Chapter 7. But once we start talking with them about their actual goals, it becomes clear they may need a different type of bankruptcy.

If you want to protect a major asset, like a home or car, you may want to consider Chapter 13 bankruptcy instead. This isn’t always the case, but it does come up sometimes when it’s a client’s top priority.

At our firm, we’re committed to helping our clients get exactly where they want to go. We don’t want to shove you into a type of bankruptcy that doesn’t work for your ultimate goals. So we always talk with you about where you want to be at the end of your bankruptcy and why.

And that conversation helps us determine, with your help and input, which bankruptcy chapter might be right for you.

Previous Bankruptcy Filings

If you’ve filed for bankruptcy in the past, you may face restrictions on filing for Chapter 7 again within a certain timeframe. 

Generally speaking, you need to wait for a period of 6-8 years from the date of your previous filing in order to file again. The actual time depends on whether you originally filed Chapter 13 or Chapter 7 and when exactly the courts discharged your case.

If you’re concerned that you haven’t waited enough time to file bankruptcy, we can talk with you about your options. There are a lot of things you can do to get back on track after a bankruptcy besides refiling. Unfortunately, not every law firm advises their clients on rebuilding well after a bankruptcy. So if there are areas we can help you improve while you decide whether you need a bankruptcy in the future, we’re happy to talk through it with you.

Free Consultation with a Memphis Bankruptcy Attorney

Truthfully, the best way to know whether you qualify for a Chapter 7 bankruptcy is to speak with a really great attorney about it.

We don’t just say that because it benefits our firm. The process involves careful consideration of various factors, including your income, expenses, and previous bankruptcy history. Some people might try to figure out the math on their own, and as a result, assume they qualify or don’t based on incorrect information.

Fortunately, while this whole process may sound really complicated, it’s actually very simple to get started. And from there, our attorneys can handle all the complexities that might come up.

Our award-winning Memphis bankruptcy team handles your case every step of the way. We make it easy for you, and unlike many firms, we never charge extra for questions or concerns.

That’s how we become one of the most respected firms in the Mid-South. We love helping people get a fresh start and rebuild their lives. And we would love to help you, too.

To get started with your free consultation and find out all about your options, just give us a call at 901-327-2100 or contact us online.