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simple check to test your eligibility for Chapter 7 bankruptcy filling

Most people who file for bankruptcy choose Chapter 7 instead of chapter 13, because it is fast, efficient, easy payments file and does not require the passage of time. Chapter 7 Bankruptcy usually takes less time to finish. The process is completed in about 4-6 months, usually requires only one trip to the courthouse by the person filing for bankruptcy to go free debt.

However, all those who seek to liberate themselves from debt by the bankruptcy filling will be eligible to file under Chapter 7. If after taking the remaining income that you spend on certain allowed expenses and monthly payments of alimony, tax debts, secured debts as mortgage or car loan, and some other types of debt is sufficient to support payment under Chapter 13 repayment plan, as do not to declare bankruptcy under Chapter 7.

Check your eligibility criteria

The first step to verify the eligibility of filling Chapter 7 bankruptcy is to measure the average of the last six months against the median income for a family of your size your state.

Once you have estimated revenue, compared to the average income of your state (You can find the average income by state information. www usdoj.gov / ust, click on the average test information). If your income is on average higher than the average income of their state, you may file Chapter 7 bankruptcy, which must pass another proof of eligibility, called "means test."

Trial Media "Based on the results of calculation of disposable income. For their disposable income, calculate your average monthly income as described in the preceding paragraph. In this amount, subtract the following characteristics:

  • Some allowable expenses such as clothing, transportation, food, etc., in amounts set by the IRS (Note that this amount may be less than actual expenses.)
  • Payments will be made monthly in a safe place and priority debts. secured debts such as mortgage and / or car loan, the priority debts include the child support, alimony, tax debts and unpaid wages to employees.

If your monthly income total available after subtracting these amounts is less than 100 USD, you pass the means test and be allowed to file for Chapter 7. If your total disposable income is above $ 166.66 then your will automatically force a Chapter 13, except have good reasons for facts facing a special circumstance is not reflected in the calculations above. You may be eligible to file under Chapter 7, but it is a case by case basis.

What if disposable income is between $ 100 and $ 166.66? If your disposable income in this range, whether its surplus is insufficient to pay more than 25% of its security, non-priority claims, such as credit cards, student loans and medical bills. If not, you go the means test, and Chapter 7 remains an option rather than fail the means test, and it is forbidden to use Chapter 7.

Summary

It is possible that since most people prefer to complete the bankruptcy (if this is the right option for debt-free) under Chapter 7 because it does not require you to pay a portion of your debts, as Chapter 13 does. But first his right and must comply with the requirement for Chapter 7 to opt for this option.

Cornie Herring is the author of "Credit StudyKiosk Basic" – target = "_blank"> http://www.studykiosk.com/creditbasics . "StudyKiosk Credit Basics" is an information site on the basics credit, target = "_blank" debt consolidation "and target = "_blank"> the bankruptcy.

About the Author

Cornie Herring is the Author from “StudyKiosk-Credit Basics”- http://www.studykiosk.com/creditbasics. “StudyKiosk-Credit Basics” is an informational website on credit basics, debt consolidation and bankruptcy.

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