If you are drowning in debt, you are not alone. Numerous Virginia residents are struggling to meet their debt obligations. Like the many other individuals in the same situation, you are probably looking for ways to get out of debt for good. Various debt relief options are out there, but not all will make sense for your particular circumstances. Chapter 7 relief, for example, is only meant for those who genuinely lack the funds to pay back their creditors. Does that apply to your specific situation?
If you want to know if Chapter 7 bankruptcy is an option for you, there is a simple way to find out. You need to take something called the means test. It is nothing to stress over. There are no right or wrong answers. All it does is compare numbers. What numbers are needed to take the test, and how do you read the results?
To take the means test, you will need to gather half a year's worth of income statements. You will also need to find out what the state's current median income level is listed at. This test will simply compare your income to the state median. If your income number is below the state's number, you pass. That means Chapter 7 is an option for you.
What if you fail?
If your income exceeds the state median income level, all hope is not lost in your case. You may still qualify for Chapter 7 relief; you'll just have to do a little more research. Those whose disposable income is insufficient, even if their income level is too high to qualify for Chapter 7, may still file. The court will look at how much money you have left after paying for:
- Medical expenses
- Transportation costs
If you have little to nothing left after meeting these necessary expenses, you may be able to receive Chapter 7 relief approval.
What happens if your petition fails to receive approval?
Again, all hope is not lost. If the court decides to deny your Chapter 7 petition, you can either switch your filing to a Chapter 13 petition or wait and try to file Chapter 7 again at a later date. With a little help, you can decide the best way to proceed.