Our Bankruptcy Chapter 7 attorney can help you determine whether the most common chapter of bankruptcy is right for you. Filing this petition would allow you to discharge certain unsecured debts (e.g., medical bills and credit card bills) and liquidate nonexempt assets to pay back a portion of your debt. To qualify for this chapter, you must take a means test to evaluate your financial situation. Attorney Penny Bach and our legal team will walk you through eligibility requirements.
Providing Reliable Bankruptcy Advice When You Need It Most
If you feel completely overwhelmed by the amount of debt you have and see no solution in sight, it is understandable why you may be considering bankruptcy. Although bankruptcy gets a bad name, it is often the most effective way to allow consumers to start fresh and have a new chance at re-building their credit.
At Bach Law Offices, Inc., our Northbrook Chapter 7 bankruptcy attorneys can go over your situation with you to determine if this is an appropriate legal action for you. Chapter 7 is the most common chapter of bankruptcy, which allows you to discharge specific unsecured debts and liquidate or sell nonexempt assets to pay back a portion of your debt.
A few examples of debt which can be discharged in Chapter 7 include:
Can My Debts Be Discharged In Chapter 7?
Our Northbrook Chapter 7 bankruptcy attorneys have 40 years of combined experience in the field of bankruptcy law. There are specific requirements you must meet to qualify for Chapter 7. You will have to take a means test which evaluates many aspects of your financial situation to figure out whether or not you qualify for this chapter. Our firm is here to lead you through the steps of the proceedings, which can be quite confusing and complex.
How Does Chapter 7 Work?
The first step to file for Chapter 7 is to file a petition with your local bankruptcy court. At this time, they will typically put forth an automatic stay which protects you from all types of collections. This prevents phone calls, garnishments, foreclosure, and lawsuits. If your petition for Chapter 7 is approved, you are released from the obligation to make payments.
Do I Qualify For Chapter 7 Bankruptcy?
If you’ve decided to file for a Chapter 7 bankruptcy, it’s important to remember that there are requirements you, as the debtor, must meet in order to be eligible to file. To determine eligibility, you’ll need to pass what’s referred to as a “means test,” to see where your income falls in comparison to the median income level in the state in which you are filing the bankruptcy.
Chapter 7 Means Test
In order to successfully pass the means test, you must have very little to no disposable income. The means test will take your average monthly income that was accumulated over the past 6 months before you filed for bankruptcy, then compare it against the median income of a similar household in your state. Should your income fall below the media, you will automatically qualify to file for Chapter 7 bankruptcy. Although the median income will obviously vary state to state, many people who are having severe financial strains and debt difficulties find that they pass the means test with virtually no issue, since they are likely to be making very little money to begin with.
What If My Income Is Above The Median?
If the test finds that your income is above the state’s median, it’s not to say that you are automatically exempt from being able to file a Chapter 7 bankruptcy – there are options for debtors who do not pass the means test. Since the means test is basically a balance stage where your expenses are simply weighed against your income, you can complete the entirety of the means test instead of trying to qualify for Chapter 7 bankruptcy based solely on your income. If after you deduct all allowable expenses from your income leaves you with no disposable income, you’ll be able to file for Chapter 7 bankruptcy.
Taking The First Step Towards Debt-Free Future
Filing for bankruptcy can be an overwhelming and often isolating endeavor, but it has a unique set of benefits to offer immediate relief to the issues you face. By filing for bankruptcy, you are putting an end to creditor calls, foreclosures, and potential lawsuits. If you’re currently struggling with insurmountable debt, we urge you to contact our trusted team at Bach Law Offices, Inc.. We have decades of experience assisting clients through even the toughest of bankruptcy cases.
Contact our office today at (847) 440-5998 if you would like to make an appointment for a free case consultation.