Chapter 7 bankruptcy is perhaps the most common form of bankruptcy because it makes it possible for a person in debt to gain a fresh financial start. Over the holiday period, many people rely solely on their credit cards to make purchases, and as a result, they can find themselves in huge amounts of debt in the new year. Filing for Chapter 7 bankruptcy can quickly clear these debts in many cases.
If you are worried about the credit card debts that you have accumulated, you should consider whether you are eligible for Chapter 7 bankruptcy.
How do I know if I am eligible for Chapter 7 bankruptcy?
One of the main requirements of Chapter 7 bankruptcy is that your income must not be too high. This means that you must undergo a “means test” before filing. Your monthly income, as well as the size of your household, will be compared with the median income of Washington. If your income is considered to be below average for the state, you will be eligible to file.
How does Chapter 7 bankruptcy work?
Chapter 7 bankruptcy works through the liquidation of your assets. A significant amount of your assets will need to be sold so that your debts can be repaid. If your assets are not enough to repay all of your debts, you will most likely benefit from a debt discharge upon completion of the bankruptcy.
Chapter 7 bankruptcy is a great option for many who have credit card debts, but you should not file before you have carefully considered all of the ways that it could impact your life.