Do I qualify for Chapter 7 bankruptcy in Virginia?

Filing for Chapter 7 bankruptcy can be a great option for many people who are severely in debt, but you do have to qualify for it.

The main idea of Chapter 7 is that you can have many of your debts discharged. Who wouldn't want that? Prior to 2005, all you had to do to qualify for a Chapter 7 bankruptcy was to show that your living expenses equaled or exceeded your income. There was a perception that people who had the ability to repay some part of their debts were abusing the system by filing a Chapter 7 bankruptcy. Congress made it harder to file a Chapter 7 with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Determining your eligibility to file for Chapter 7 generally comes down to how much you make. Your income is compared to the median income in Virginia. If you make more than the median amount, you have to take a "means test." The means test will look at how much you make, but also what deductions you can claim. Some of the deductions are set by the IRS and some of them are based on your actual expenses. If there are enough deductions, you could still qualify, even though you make more than the average income level.

If the means test shows that you still do not qualify for Chapter 7, don't worry! You still have other options. A more popular choice for someone who earns too much to qualify for Chapter 7 is Chapter 13 bankruptcy. Chapter 13 bankruptcy takes your debt and helps you repay it in manageable monthly payments.

If you are thinking about filing for Chapter 7 bankruptcy in Virginia, contact the Hampton Roads bankruptcy attorneys at Hampton Road Legal Services. Call us at 757-276-6555 to schedule a free, no-obligation consultation!

Edrie Pfeiffer
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Edrie Pfeiffer, Bankruptcy & Divorce Attorney