Consult with a Bankruptcy Attorney
As stated above, bankruptcy is complicated that mandate certain procedures be taken before, during, and after your petition has been ﬁled with the court. The ﬁrst step that should be taken is to consult with an attorney that can analyze your situation and discuss the advantages, disadvantages, and effects of ﬁling for bankruptcy. In order to do so, you must prepare a lot of information in advance which includes your income and all of your liabilities (or at least a ballpark thereof).
You must also meet certain ﬁnancial requirements to qualify for a Chapter 7 Bankruptcy. One way of qualifying for a Chapter 7 is to determine whether you are above or below the median income for your state and household size. Your income, for bankruptcy purposes, is determined by your income from all sources within the last six months from the time you ﬁle your petition. The median income does change periodically. As of now, the median income is as follows:
Household Size Median Income
If your income is below the median income for your household size, then you qualify for a Chapter 7. If your income is above the median income for your household size, you still may qualify. However, there are additional steps that must be taken. In that case, we have to analyze whether your income and debts meet the courts “means test.”If you don’t qualify for a Chapter 7 either based on your income or by application of the means test, a Chapter 13 Bankruptcy may still be an option. Chapter 13 bankruptcies are also power debt reduction tools.