Before people in Louisiana or elsewhere can pursue bankruptcy filings, they have to know for which type they qualify. There a big difference between the two bankruptcy options used for personal debt relief. With Chapter 13, one still has to repay creditors. A Chapter 7, however, can completely clear certain debts. No court is going to allow you to have your debts discharged if you really do have the income to pay back creditors.
Consumers commonly use Chapter 7 bankruptcy when they truly lack the funds to pay back creditors, but it is not available to everyone. There is a method you can use to find out if you are eligible for this debt relief option. It is a simple test called a means test.
You can access the various forms needed to apply for debt relief through a bankruptcy attorney. This includes the means test form.
In order to complete a means test, you will need to have information about your income and the state's current median income level. You can get this information by looking at your own personal records and by reviewing the state's census records.
If, according to the means test, the state's median income is higher than your personal income, you may be able to file for a Chapter 7 bankruptcy. If, on the other hand, your income is higher than the currently listed state median income, you may be able to pursue a Chapter 13 filing.
Now, if your income is higher than the state median but your disposable income is still lacking, you may still have the ability to pursue a Chapter 7 bankruptcy. Disposable income is any money you have left over after paying your monthly expenses. There are limits on what bankruptcy law considers allowable expenses, however. Those that courts typically allow include reasonable:
- Transportation fees
The key word here is reasonable. The court's idea of reasonable may be different than yours. So, if you are not sure if your expenses qualify, you can ask your attorney.
Get a fresh start
An experienced bankruptcy attorney can assist you in completing the means test and pursing a Chapter 7 bankruptcy -- if you qualify -- or any other debt relief option that will help you get the fresh financial start you desire.