If you are one of the many Pennsylvania residents who are drowning in debt, you probably want to know what debt relief options are out there for you. Chapter 7 bankruptcy sounds appealing, as it can result in the discharge of your debt if approved. So the question is -- do you qualify for this type of bankruptcy protection? Not everyone does.
In order to find out if you can pursue a Chapter 7 filing, you can take a simple test. It is called a means test. It is simple to take and read. This is not something to stress about, there are no right or wrong answers.
Taking the means test
To take the means test, you just need to get ahold of the necessary forms and input the requested information. You can download a means test from the internet or you can obtain it from a bankruptcy law attorney. The information you need to complete this test is:
- Statement of your current income
- The current median income level in Pennsylvania
What you are going to do is compare your income level to the state's median income level. If your income falls below the state median, you can pursue a Chapter 7 bankruptcy.
What happens if the test says I don't qualify for Chapter 7?
If your income level is higher than the state's median income level, it does not mean that a Chapter 7 filing is beyond your reach. At this point, it is necessary to really dig into your finances in order to determine what your monthly disposable income is. If you do not have enough money to make payments to your creditors after meeting your basic needs, then you may qualify for a Chapter 7 filing.
If you do decide to file for this type of bankruptcy and the court rejects your filing, you may convert your petition to a Chapter 13 bankruptcy, which still offers some debt relief, but it also requires that you make payments to creditors for three to five years. Legal counsel can offer more information on this.
Get the fresh start you need
If you have so much debt that you feel you need help overcoming it, it is okay to ask for assistance. A number of debt relief options are out there that may benefit your situation if Chapter 7 bankruptcy is not a good fit.