How do I qualify for Bankruptcy

Your question may be two fold, “do I qualify for bankruptcy and should I file at all?”

Everyone can qualify for some form of bankruptcy (either Chapter 7 or Chapter 13).
At Chandraiah Law, we will take a detailed look at your financial situation and help you determine if and what type of bankruptcy is the best option for you.

To help answer these questions two main calculations are done:
1) A comparison of your income to that of the State of Illinois median income level
2) A detailed analysis of your finances, called the “means test.”
Both of these checks will help determine if you qualify for Chapter 7 (“clean slate”) or Chapter 13 (“repayment plan”) bankruptcy.

The first step in determining if you qualify for Chapter 7 bankruptcy is to compare your income to the median income for the State of Illinois. To be eligible for Chapter 7 bankruptcy, you must make less than this median income level. We will discuss this comparison and what it means for you.

The next step we will discuss is the “means test,” which compares your monthly income to your expenses. Some important things we will look at are if you own your home, vehicle(s), or other valuable items outright and want to keep them. If so, Chapter 13 may be a better option for you. Another deciding factor may be how much debt you have in credit cards, medical bills, or deficiencies on repossessed vehicles. If you have a substantial amount of debt in these areas, then Chapter 7 bankruptcy may be your best option. The means test provides a clear picture of how your income compares to your debt. It can show the government that you are in severe debt and need help now.

If you have any questions about your specific financial situation and want advice from a caring professional please make an appointment for a free consultation at Chandraiah Law. We look forward to helping you explore your options.