Eligibility requirements for filing Chapter 7 bankruptcy

Eligibility requirements for filing Chapter 7 bankruptcy

| Jul 7, 2020 | Bankruptcy |

There are many things that people in Maryland can plan for in life. Much of what they plan for revolves around what they can afford given their current financial situation though. Usually these plans will work out, but sometimes unexpected events occur and the plans no longer work. In some situations, the unexpected events can even people to not only change their plans, but also force them to incur debt in the form of medical bills or credit card bills while they attempt to remain afloat.

However, there are some situations when the debt load becomes too big of a burden to manage any longer and it may be very difficult to envision a time when they will rid themselves of the debt. If people find themselves in this unfortunate position, people do have options still. One of those options is to file for Chapter 7 bankruptcy. This is a process which allows people to discharge their debt and begin a new debt free life. However, not everyone can file for Chapter 7 bankruptcy. First they must meet certain eligibility requirements.

People seeking to file for Chapter 7 bankruptcy must have gone through an approved credit counseling program within six months prior to filing for bankruptcy. They also must not have had a bankruptcy petition dismissed within six months of filing due to them walking away or voluntarily dismissing the petition.

While people can also be solvent and still file for Chapter 7 bankruptcy, individuals must meet a means test in order to be eligible, if people have an income greater than the state median. They must demonstrate that the filing is not abusive. People must demonstrate they are earning less than $12,850 per month or that their income is less than 25% of their unsecured debt, which must be at a minimum $7,700.

Many people in Maryland have debt that has become unmanageable. Many times the reason for this is out of their control as well. While this creates many difficulties, there are ways that people can rid themselves of their debt and achieve a fresh start. Experienced attorneys understand these complicated proceedings and may be able to guide one through it.