How to File for Chapter 7 Bankruptcy In Gary, IN

Chapter 7 bankruptcy is one of the most commonly used types of bankruptcy proceedings.  Chapter 7 bankruptcy is often used by individual debtors, but sometimes businesses can also discharge their debts through Chapter 7 bankruptcy. Not just anyone is able to file for Chapter 7 bankruptcy. There are certain eligibility requirements that a debtor must satisfy in order to be able to file for Chapter 7.

The Means Test

Only certain people with low disposable income levels are eligible for Chapter 7 bankruptcy. Debtors filing for Chapter 7 bankruptcy must not earn too much money, and must satisfy the means test. The means test looks at all of the debtor’s monthly income after normal expenses and compares that debtor’s monthly income to Indiana’s median income level.

A debtor’s eligible monthly income will include sources of income such as wages, tips, salary, bonuses, overtime, commissions, income from a profession, income from a business, farm or rental property, royalties, interests on loans, dividends, domestic support (e.g., spousal support or child support received), benefits such as workers’ compensation and disability benefits, retirement income, and annuity payments. After totaling up the debtor’s eligible monthly income, regular expenses are subtracted from the total. This includes any rent or mortgage payments, spousal support payments or child support payment obligations, along with a handful of other qualified expenses. If the resulting income level is below the state’s median income level, then the debtor is eligible to file for Chapter 7 bankruptcy.

Debtor Cannot Have Recently Discharged Debts Through Bankruptcy

Another eligibility requirement for Chapter 7 bankruptcy is that the debtor cannot have previously discharged his or her debts through Chapter 7 or Chapter 13 bankruptcy in the recent past. The debtor cannot have discharge to their debts in Chapter 7 bankruptcy within the preceding eight years, or in Chapter 13 within the preceding six years. Similarly, in order to be eligible for Chapter 7 bankruptcy, the debtor cannot have recently filed for bankruptcy within the preceding six months.

Debtors Must Attend A Pre-Bankruptcy Credit Counseling Session

Debtors looking to file Chapter 7 bankruptcy are required to attend a pre-bankruptcy credit counseling session within the six months leading up to their bankruptcy filing. This credit counseling session will examine all of the debtor’s option besides bankruptcy, and will result in a recommendation of what the debtor should do. The credit counselor’s recommendation is non-binding, so a debtor can choose to file for bankruptcy even if that is not the credit counselors recommended course of action.

Work With An Experienced Indiana Bankruptcy Attorney

When you are preparing to file for Chapter 7 bankruptcy in Indiana, it is important that you get in touch with an experienced bankruptcy attorney to help you make sure that you are eligible for Chapter 7 bankruptcy in the first.  An experienced bankruptcy attorney can help you assess your eligibility and can help you with the bankruptcy filing process. The Chapter 7 bankruptcy attorneys at the Whitten & Whitten have many years of experience helping clients file for Chapter 7 bankruptcy and we can help you. Contact us today.