People struggling with making monthly payments on any of their debts have likely looked into ways to resolve those debts in alternative ways. Bankruptcy is one of the ways that thousands of individuals use to find permanent relief from debts they would otherwise never be able to resolve each year. Individual consumer bankruptcy can permanently resolve credit card debt, medical bills, mortgages, car loans, and many other common kinds of debt. While bankruptcy can be extremely effective for debt relief, it does have several requirements for filers to qualify. If you’re considering filing for bankruptcy to find permanent and lasting debt relief in Marshall, MN, or the surrounding area, Behm Law Group Ltd. can provide legal guidance and protection throughout your case. Our attorneys can first determine if you will qualify for Chapter 7 liquidation or Chapter 13 reorganization bankruptcy.
Chapter 7 Qualifications
Chapter 7 bankruptcy works to liquidate filers’ non-exempt assets in exchange for the permanent discharge of their debts. In most cases, people can fully protect or exempt all of their assets.
- Filers must pass the Means Test, which measures your debt-to-income ratio. If this ratio is lower than the state average or median for a similarly sized household, you can qualify for Chapter 7 bankruptcy. If you are married, you can measure you and your spouse’s income-to-debt ratio jointly.
- Filers who previously filed a Chapter 7 case, but had their petition dismissed for any reason, can’t file again for 181 days.
- Filers cannot have obtained a Chapter 7 bankruptcy discharge within the past eight years.
- Filers cannot have obtained a Chapter 13 bankruptcy discharge within the past six years.
- Filers must attend a court-approved credit counseling course within 180 days prior to the filing their case.
- Filers must pay all bankruptcy fees and submit a factually accurate petition to the court listing all of their debts and all of their assets.
Chapter 13 Qualifications
Chapter 13 bankruptcy works to reorganize filers’ debts into a manageable repayment plan that considers their monthly reasonable and necessary living expenses and their level of monthly disposable income.
- Filers who don’t pass the Chapter 7 Means Test can choose to file Chapter 13 instead.
- Filers cannot have unsecured debts over $419,275, including debts like credit cards and medical bills.
- Filers cannot have secured debts over $1,257,850, including debts like mortgages and car loans.
- Filers need to have sufficient monthly income that exceeds their monthly reasonable and necessary living expenses to be able to make the monthly payments outlined in their chapter 13 repayment plan.
- Filers must attend a court-approved credit counseling course within 180 days of filing their case.
- Filers must prove that they have filed all federal and state income tax returns for the past four years.
Generally speaking, filers for Chapter 7 and Chapter 13 should not have engaged in any fraudulent behavior, such as maxing out credit cards immediately before filing or hiding assets.
To learn more about finding permanent debt relief in Marshall, MN, and the local area by filing a bankruptcy case, contact Behm Law Group Ltd. by calling (507) 387-7200 or by emailing email@example.com.