One of the primary questions that people have when they are going to file for bankruptcy is what chapter they will file under. The two primary forms of personal bankruptcy are Chapter 7 and Chapter 13. Both of these can offer the relief that you need, but they do have some very specific differences.
The primary difference is that you won’t make repayments on a Chapter 7 plan, but you will have to turn over more assets than you do on a Chapter 13. While you can keep more assets on a Chapter 13 bankruptcy, you will have to make regular payments on the debts. These payments go to the bankruptcy trustee to pay off some of the debts.
Chapter 7 bankruptcy is preferable for some people. If this is the type you want to file, you need to ensure that you qualify for it. You have to meet the criteria set forth by the means test. This means that your average income over the six months prior to the filing can’t be more than the median income for our state.
You also can’t file a Chapter 7 bankruptcy if you’ve had a previous bankruptcy within a certain timeframe. This time is years since you last filed a Chapter 13 or eight years if you filed a Chapter 7. If you don’t meet those minimum waiting periods, you can’t file a Chapter 7. Your prior case also can’t have been discharged within the 180 days prior to your current filing.
If you have too much disposable income, which is money that is left after paying basic bills, and you are above the median income, you won’t be able to file this form of bankruptcy. You also can’t have anything in your case that makes it appear like you are trying to defraud the court or your creditors.