Qualifying For Bankruptcy

The Tampa bankruptcy process is meant to be a tool of financial relief. However, anyone dealing with overwhelming debts often feels confused and anxious. The key to finding relief is through education and understanding, and the best place to start is qualifications of bankruptcy. You may have heard that not everyone will qualify for bankruptcy help. This is misleading.

Eligibility For Chapter 13

Chapter 13 bankruptcy is open to the majority of consumers dealing in debt. While there are some restrictions, it is safe to say that the average borrower with debt is more than qualified to file for Chapter 13.

The only restrictions in filing for Chapter 13 are related to the amount of disposable income, the total amount of debt owed and the type of debt. For example,  you may not be eligible for Chapter 13 bankruptcy if your secured debts exceed $1,010,650 and unsecured debts exceed $336,900.  Currently, some tax debts, student loan debts and back-due domestic support payments are not eligible for bankruptcy help. If you do not have sufficient disposable income to maintain a repayment plan, you may be eligible for Chapter 7 instead.

Eligibility For Chapter 7

Chapter 7 bankruptcy is the more restrictive of the two types of bankruptcy, but still manages to help many people each year. The main restriction found in Chapter 7 bankruptcy is related to insufficient income levels and types of debt.

In order to be eligible for Chapter 7, you will need to pass a means test. This test evaluates your income level, debt level, current county of residence and number of people in your household against the current median income level of your state. If you meet or fail this test, you may be eligible to file for Chapter 7. Having an exceeding score on this test would disqualify you, but you may be able to seek Chapter 13 bankruptcy instead.

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