Although not so new anymore, changes to the bankruptcy laws passed in 2005 make it more complicated to file for Chapter 7 bankruptcy. Debtors are now required to take a means test which determines their eligibility for Chapter 7. Those who do not qualify for Chapter 7 may still be able to file under Chapter 13. To learn more about the new bankruptcy laws and how they affect your eligibility for Chapter 7 bankruptcy, contact us online. Call an attorney in Gilbert at (480) 503-9217 or Queen Creek at (480) 686-9400.
The means test now determines whether you qualify for Chapter 7 bankruptcy. If you do not qualify for Chapter 7, you may still qualify for Chapter 13 bankruptcy. Even if you have heard you may not be eligible for Chapter 7 bankruptcy, you may want to take the means test for confirmation. If you don’t qualify based on income, you may qualify based on expenses.
Chapter 7 bankruptcy is a personal bankruptcy option that liquidates debt. An individual’s eligibility for Chapter 7 is determined by a means test. A debtor may be required to sell off certain nonexempt assets to repay creditors.
Chapter 13 bankruptcy is a personal bankruptcy option that reorganizes debt. Chapter 13 is often called “wage earner bankruptcy”, as those filing will be required to repay a portion or all of their debt, based on the filer’s income. The repayment plan is set for a period of time between three and five years, interest free.
Wilson-Goodman Law Group, PLLC, is a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.