When you feel as though you have no alternatives, you might consider consulting an attorney to file for a chapter 7 bankruptcy. Do you qualify? Here are the steps to find out:
- Compare your average income over the past six months with the median income for your state. If your average income is below the state median, you will automatically qualify. The median income in the Minnesota, according to the 2014 census, was $60,828.
- If you do not automatically qualify, that does not mean that you are automatically disqualified. You will need to actually take the means test. This test takes into account your monthly expenses and determines whether you have enough disposable income to pay your bills. For some bills, they use IRS standard expense figures, which means that they will automatically fill in values for gas, clothing, food and utilities. However, you will be able to fill in your own values for mortgage, child care, and your car insurance. The results of this test will demonstrate your ability to pay your debts.
- If you have filed for bankruptcy and been denied within the last 180 days, you will be denied again.
- If you have had debts forgiven through a chapter 7 or chapter 13 bankruptcy within the past eight years, you will not be eligible for another one.
- 180 days prior to filing, you must prove that you have completed a credit counseling course. Some exceptions apply; if you have a disability or have been serving in the military, you may have this requirement waived.
- If the court feels that you are attempting to defraud them, they will reject your application. Examples of this include purchasing luxury items or transferring property or assets to family members.
If you believe that your best option is a chapter 7 bankruptcy, contact us. Don’t try to do this alone! We have the expertise and experience to guide you through this stressful time.