This form of action necessitates a certain minimum income level. Depending on the expense of living, each state has a different number, but in general you must have an income below the state average. Obviously, if you have no income, you will likely be eligible for Chapter 7 bankruptcy. If you are middle class or above, however, you should consult an attorney to determine your eligibility. If you earn too much money, you can still file for bankruptcy, but you would have to use Chapter 13 to repay your creditors.
Additionally, you should ensure that you have few assets to lose. In Chapter 7 bankruptcy, you can typically only retain your home if it has little equity. Unless your family requires two cars to commute to work, you can typically only retain one vehicle. If it is a particularly fine vehicle, you will likely have to sell it. In fact, the majority of non-essential assets will need to be sold so that the trustee can distribute the proceeds to your creditors. This is why this option is typically ideal for individuals with few assets, as they have little to lose besides their debt.
Ensure that your debts would be discharged under Chapter 7 bankruptcy. If your only debt consists of recent taxes or a student loan, this option may not be helpful, as you cannot typically eliminate these debts through bankruptcy. If you cannot pay them, you may need to negotiate a payment plan or consult an attorney if you believe extenuating circumstances exist. However, if you owe a significant amount on credit cards or have significant medical expenses, this option is likely the best, as it will eliminate such debts.
You should schedule an initial consultation with an attorney to confirm that not only are you eligible for this decision, but that it is also the best course of action for you. If it is not, your attorney may be able to assist you explore other options.""
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