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What determines eligibility for Chapter 7 bankruptcy?

| Sep 10, 2018 | Chapter 7 |

Trying to handle financial troubles on one’s own can be a scary situation. Of course, many Louisiana residents may think that the idea of going through Chapter 7 bankruptcy or another debt relief option is just as scary. However, with the right information and help, bankruptcy does not have to be a frightening experience to start or finish.

If a person is interested in filing for Chapter 7, there are certain qualifications that must be met. In particular, the individual must pass a means test. This test involves a review of financial history to rule out any possibility of bankruptcy fraud and to make sure that Chapter 7 suits the situation better than Chapter 13. It can also help determine whether the petitioner needs to go through bankruptcy at all.

The person’s income will be evaluated from six months prior to filing, then compared to the median income of the state. The review then looks at monthly financial obligations and the amounts owed. In addition to the means test, an individual looking to qualify for and move forward with Chapter 7 has to go through credit counseling.

Some people may feel intimidated by Chapter 7 bankruptcy, and others may see it as an easy way out. However, it is important to understand the steps of qualifying for this debt relief option to make sure that it suits the particular needs of a person’s situation. If Louisiana residents are interested in getting their financial affairs back on track, they may wish to find out more information on this avenue from experienced attorneys.

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