Monday, September 20, 2021
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Bankruptcy

Consumers with limited assets can file under this chapter, where their assets are liquidated to pay off the creditors. This chapter has qualifying criteria (household income). For an individual to be eligible, they have to pass the means test, i.e. a formula is used to average the income over six months before the filing of bankruptcy. This average monthly income is compared to the median income of families in the state. In case your household income is less than the median monthly income, you are eligible to file under this chapter. If, however, your income is more than the median income, deducting certain expenses as per bankruptcy laws can still make you eligible for filing under chapter 7. The deductions can include insurance, transportation, housing, food, taxes, etc. In case, you still do not qualify for Chapter 7 bankruptcy, you may file under Chapter 13.

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