Who is eligible to file for Chapter 7 bankruptcy?

There are many unexpected events that occur in people’s lives in Maryland. People may try and have a savings account so when these events occur they can pay for them. However, there are many people who are not able to save much each month. The cost of living is increasing and keeping up with the rising costs can be difficult. So, when an unexpected event occurs like a car accident or other accident, resulting in large medical bills, debt can rise quickly.

Eventually it could reach a level where people may not know if they will ever be able to rid themselves from the debt. There are different solutions people may have available to them though such as negotiating debt payments for medical bills or consolidating other debts. However, despite these efforts, many people may still be overwhelmed by debt. In these situations, people may find chapter 7 bankruptcy a good option to allow themselves to achieve a fresh start.

Not everyone that wants to rid themselves of debt can file for chapter 7 bankruptcy though. In order to do so they must meet certain eligibility requirements. One is that the income must be less than the median household income for the state.

If their income is more than the median household income, they must meet a means test to be eligible. People can still be eligible if their monthly income is less than $12,850 per month or less than 25% of their total unsecured debt, unless they are able to demonstrate special circumstances should allow them to be eligible. In addition, people must not have had a bankruptcy petition dismissed in the two years prior to filing and also received credit counseling within 180 days prior to filing for chapter 7 bankruptcy.

There are many people in Maryland who find themselves with significant debt. People may be able to rid themselves of this debt through chapter 7 bankruptcy if they meet the eligibility requirements. It is important to note that people can be solvent and still be eligible as long as they meet the economic requirements above. The bankruptcy process can be a long and confusing process and consulting with an experienced attorney could be helpful.