Falling into a situation like bankruptcy can leave any individual’s financial status in a very precarious situation. In such situations filing for chapter 7 bankruptcy can help resolve one’s unsecured debts.
Before filing for bankruptcy under chapter 7, it is essential that you contact a Katy bankruptcy lawyer. However, ensure that you look for a lawyer that specializes in bankruptcy. This will make your filing process a lot easier. In addition, lawyers can eliminate the hassle of all the legalities and paperwork for your case.
Here are the qualifying criteria you should keep in mind:
- It is important to go through a Chapter 7 Pre Bankruptcy Credit Counseling at least six months prior through an approved agency before filing for bankruptcy. The certificate from the counseling should also be submitted to court while the petition has been filed. After filing the petition the petitioner must complete a debtor’s education course.
- If your household income or net earnings is lower than the state’s median household income or net earnings for the same household size, you qualify. However, keep in mind that the state-to-state median household income or net earnings differ from one state to another.
- If the household income or net earnings is higher than the median, you can still qualify by passing a “means test” which can get a bit complex. In such a situation, the individual must determine the amount of disposable income after all the allowed expenses on a monthly basis, in order to pay off a certain portion of the unsecured debts.
- If the disposable earnings or income are higher than the prescribed limit, then the individual wouldn’t pass the mean test and is not discharged to file for Chapter 7 bankruptcy.
- When filing for Chapter 7 bankruptcy, one fails the means test there can be a presumption of abuse. However, the presumption of abuse can be avoided in cases of student debt, divorce or separation, actively serving in the military, recent job loss, or any serious medical condition.
- A previously filed petition under Chapter 7 must be duly discharged for a period of 8 years has to elapse in order to file the petition again.
- If the filed petition under Chapter 7 has not been completed and/or been discharged, one is free to file for the petition under Chapter 7 if the judge presiding over the prior petition does not disqualify the individual in question from filing again.