You work hard to support your loved ones, but in these current economic times, money for the mortgage and car payments may be scarce. Although the thought of going through a bankruptcy is scary, it may be your only recourse. Look at the following information concerning Chapter 7 bankruptcy to see if you are eligible.
Chapter 7 is one of two types of bankruptcy commonly used by a consumer. It is a liquidation of assets to pay off debts that do not have collateral like credit cards and personal loans. You do not have to file a repayment plan. Instead, a bankruptcy trustee gets and sells your nonexempt assets to your creditors.
You must pass a means test if you want to file for Chapter 7 bankruptcy. The means test looks at your monthly household income to determine if it is less than your state’s median income for your size of family. For example, in the state of Missouri, if you have four people in your household, your monthly income cannot be over $7,677.42.
You cannot file for Chapter 7 if you filed 180 days before the current filing date, and the court dismissed your petition because you did not show up for your hearing. In addition, you must have credit counseling 180 days before filing.
You should not have to fear the loss of your car or home as long as your budget allows it. However, the courts may not allow you to have a second property or vacation home.