Chapter 7 Bankruptcy, means test and credit counselling

Eligibility for Chapter 7 and the “Means Test”

Under the new bankruptcy law that went into effect in October of 2005, all bankruptcy applicants who wish to file under Chapter 7 must meet certain eligibility requirements based on the “means test.” Under the “means test,” if your current monthly income is less than the median income in your state, you can file for Chapter 7, if not you must file a Chapter 13, which is a reorganization of your debt.

Credit Counseling and Debtor Education.

As part of the new bankruptcy laws, people wishing to file for bankruptcy under Chapter 7 or Chapter 13, must now complete a credit counseling program before they will be allowed to file a bankruptcy petition. In addition, bankruptcy filers must obtain a debt management counseling program before being allowed to complete the bankruptcy process. In order to comply with these post-discharge debtors and credit counseling education requirements, filers must work with agencies that have been approved by the U.S. Trustee Program.

Financial Choice Network recommends you seek a bankruptcy attorney to see if you would qualify and to determine which type of bankruptcy would be best for you. Financial Choice Network can connect you with a professional! For a free consultation call, or fill out the form and get back on the road to financial freedom!.