Eligibility Requirements For Chapter 7 in Saint Cloud, MN

While filing for bankruptcy is an option for resolving severe financial issues, it may not be open to everyone. At least, every type of bankruptcy may not be open to everyone. There are specific requirements to qualify for each type of bankruptcy. Here is what you need to know about being eligible for filing Chapter 7 bankruptcy.

The Means Test For High-Income Earners

If you earn more than the median income for the state, you must complete the means test before you can file for Chapter 7 bankruptcy. The means test takes your income and subtracts your expenses. The difference is your disposable income which can be used to pay back a part of your debt. If your disposable income is more than $12,475, then you cannot file for Chapter 7 bankruptcy. Instead, you must file for Chapter 13 bankruptcy, which creates a plan to pay back your debt over 60 months.

Means Test Exemptions

You are exempt from taking the means test and can go straight to filing a Chapter 7 bankruptcy case if you are an injured veteran who acquired debts during your time of active service.

You can also be exempt from the means test if your debt is mostly non-consumer debt. For example, you have a lot of business debt and some consumer debt.

Previous Bankruptcy Filing Limits

Aside from passing the means test, you have to be aware of time limits on filing bankruptcy cases. You cannot file for bankruptcy if you already started a Chapter 13 bankruptcy case within the last six years. Also, the same applies to Chapter 7 cases within the last eight years. This prevents people from repeatedly filing bankruptcy cases to get out of debt.

Required Counseling

Another requirement for filing a Chapter 7 bankruptcy case in Minnesota is required financial counseling. You are required to complete a financial counseling course and a credit counseling course, which are both designed to teach you about money and debt management. Failing to complete either course of counseling can disqualify you from filing Chapter 7 bankruptcy.

Clear of Fraud

Finally, you must be clear of any fraud regarding debts and filing for bankruptcy. Committing fraud means that your case may be denied. If the court can’t trust that you are forthright in trying to handle your debts, then it is not likely to help you with those debts. You will have difficulty filing any type of bankruptcy if you are caught in a fraud case.

Discuss Everything With an Attorney

Qualifying for Chapter 7 bankruptcy is relatively simple, but navigating the legal system can be difficult. Before you try to file for bankruptcy, discuss your case with a bankruptcy attorney. Contact Kain + Henehan by calling (612) 438-8006 or filling out the online form to schedule a free consultation so we can help you make the right choice.