Chapter 7 Bankruptcy, also called “Straight Bankruptcy,” allows a debtor to discharge, or wipe-out, unsecured debts. Unsecured means that there are no liens against the property you own, given in exchange for the debt. Examples of unsecured debts are credit cards, medical bills, professional’s fees, or personal loans. However, most student loans and many taxes are not dischargeable.
Who is eligible?
A person is usually eligible to file Chapter 7 if his or her family income over the last six months is Below Median Income for their state. These income limits are given by the U.S. Census Bureau. Your income will be evaluated as a part of what is called a “Means Test.” If your income exceeds the median income set, there are other factors the court will review to determine your eligibility. Because there are so many factors to consider when determining eligibility, your best bet is to speak with us to determine if you are Chapter 7 eligible.