How Much Debt to File Chapter 7 Bankruptcy

In order to determine if bankruptcy is the best solution to your current situation you must first determine if you are qualified to file a Chapter 7 case.

Are you eligible to file a Chapter 7?

This is determined by seeing if you qualify under the means test. You will qualify if your current monthly income is below your current state median limit. If your CMI is more that your state median income you can go through the means test calculation to see if you qualify.

Are your debts dischargeable?

Even if you do qualify to file a Chapter 7 case you want to make certain it will give you the relief you are seeking, a true fresh start. To determine this it is important to look at the type of debts that you are seeking to discharge. Most debts (including both secured and unsecured) are fully dischargeable, although discharging a secured debt likely means surrendering the collateral.

Have you considered the costs?

Filing a Chapter 7 bankruptcy does come with certain costs. There are the monetary costs, such as the filing fees and costs of credit counseling and attorney fees, if you hire a private attorney. There are also non-monetary costs to consider.

Is this the right time to file a bankruptcy?

If you file a Chapter 7 case that is successfully discharged you are unable to file another Chapter 7 and receive a discharge for 8 years. While it is impossible to predict upcoming unexpected financial difficulty, you should still think about your current level of debt as you try to decide if filing a case now is worthwhile.