Chapter 7 is a type of bankruptcy that is designed to give individuals and businesses a fresh start by wiping out most of their unsecured debts, such as credit card debt, medical bills, and personal loans. In a Chapter 7 bankruptcy, a trustee is appointed to oversee the liquidation of the debtor’s non-exempt assets, which are sold to repay creditors. However, most debtors in Chapter 7 do not have any non-exempt assets, and so they are able to keep all of their property while still eliminating most of their debts. Certain debts, such as taxes, student loans, and child support obligations, are generally not dischargeable in a Chapter 7 bankruptcy.

To determine your eligibility for Chapter 7 bankruptcy, you must first pass a means test. The means test compares your income to the median income in your state for a household of your size. If your income is below the median, you automatically qualify for Chapter 7. If your income is above the median, you may still be eligible for Chapter 7, but you must complete the means test in its entirety to determine if you have enough disposable income to repay some of your debts in a Chapter 13 bankruptcy.

The means test involves a complex calculation that takes into account your income, expenses, and other factors. It is important to have an experienced bankruptcy attorney help you with the means test, as there are several factors that can affect your eligibility. For example, certain expenses may be allowed to be deducted from your income, which can help you qualify for Chapter 7 even if your income is above the median.

Additionally, even if you pass the means test, you may still be ineligible for Chapter 7 if you have engaged in certain types of fraudulent or illegal activities, have filed for bankruptcy too recently, or have too much equity in your assets.

Let our experienced bankruptcy attorney help you determine your eligibility for Chapter 7 and guide you through the process.