The first question to be answered before deciding to file for Chapter 7 bankruptcy is whether you qualify for this type of bankruptcy or not. The eligibility of a person to file for Chapter 7 bankruptcy depends almost entirely on his or her household size and current income. The ratio of the current household to the income is as follows, as of April 1, 2015:
|Size of the Household||Annual Income|
To check whether you qualify for Chapter 7 bankruptcy or not, imagine being married and having two minor kids. Thus your household size will be of four persons. Now, according to the table given above, your income should either be equal to or less than $67,539 for you to be eligible to file for a Chapter 7 bankruptcy.
In case your income is slightly more than the allowed income, you may still be eligible to file for a Chapter 7 bankruptcy if there are certain expenses that the court can deduct from your income. If still, your income is more than the allowed income, Chapter 13 bankruptcy will be an option for you. In a Chapter 13 bankruptcy, you can reorganize your debts in place of strict liquidation in Chapter 7 bankruptcy.
However, if you are an owner of many assets, you might want to stay away from a Chapter 7 bankruptcy. The bankruptcy trustee will take away all your non-exempt properties and will sell them to repay your debts. This is also applicable for personal and real property (not your homestead). If you want to file for bankruptcy and retain your assets at the same time, you must go for a Chapter 13 bankruptcy.
In other words, you will have to consider a lot of things before deciding to file for a Chapter 7 bankruptcy. An experienced bankruptcy attorney, like the Recovery Law Group, can help you in deciding whether a Chapter 7 bankruptcy is the best option for you not. You can visit them at Recovery Law Group or call them on 888-297-6203.