If you have considered filing for bankruptcy, you are certainly not alone. In 2017, more than 767,700 bankruptcy cases were filed, according to U.S. Courts. Of those cases, 472,135 were Chapter 7 bankruptcies. Chapter 7, otherwise referred to as liquidation bankruptcy, is designed to wipe away most of your lingering debts, including credit card debts, medical expenses, doctors’ bills and mortgage payments. Not everyone, however, qualifies to file for Chapter 7. There are a few factors that must be met in order to file for this type of bankruptcy.
First, your income cannot exceed the state median income. In Ohio, the state median for one earner is $48,596 and for a family of two it is $60,190. If your income exceeds this amount, you may be able to pass a means test. This looks at your average income over the past five years and compares it to your debt and expenses. You cannot file for bankruptcy if you have filed a case less than 180 days prior and had that case dismissed. Next, you must take a credit counseling course within 180 days of filing for bankruptcy. This course ensures that you understand what is involved in filing for bankruptcy, the effect it will have on your credit, and how to manage your money once you begin rebuilding your credit.
Chapter 7 bankruptcy is designed to give you a fresh financial start by clearing overwhelming debt that you simply cannot keep up with.
This information is intended to educate and should not be taken as legal advice.