Are you struggling to make ends meet due to overwhelming debt? You may
be able to push the “reset button” on your financial situation
by filing for Chapter 7 bankruptcy. Chapter 7 bankruptcy, also known as
liquidation bankruptcy, can allow you to completely eliminate your outstanding
debt and start fresh towards a new financial future. It is important to
note, however, that Chapter 7 bankruptcy is a means-based privilege –
meaning that it is only available to those who qualify.
What is a Means-Test?
To determine if you are a suitable candidate for Chapter 7 bankruptcy in
New York, you must first participate in a two-part analysis of your finances
known as a “means test.” Established under the Bankruptcy
Protection Act of 2005, all individuals who are looking to apply for Chapter
7 bankruptcy must calculate their average monthly income for the previous
six months before filing for
bankruptcy. If your average monthly income is less than or equal to the state’s
median, you automatically qualify for Chapter 7.
If you do not qualify on income alone, you must continue to a second part
of the test that involves further analysis of your debts and monthly expenses.
The purpose of this portion of the test is to determine of you have enough
disposable income to afford a Chapter 13 repayment plan after deducting
all allowable expenses. If it is determined that you can afford a repayment
plan, you will not be able to file for Chapter 7 bankruptcy. Chapter 7
bankruptcy filings that are rejected are often converted into Chapter
It is always important to keep in mind that just because you can file for
Chapter 7 bankruptcy does not necessarily mean you should. While Chapter
7 will allow you to discharge your debt completely, you will be required
to liquidate any non-exempt assets in order to satisfy your creditors.
Chapter 13, on the other hand, allows you to protect your assets and repay
your creditors over a period of three to five years at a pace that best
fits your situation. Consulting with a skilled bankruptcy attorney can
allow you to analyze your finances and determine the best course of action
to solving your debt.
Debt Relief Lawyer in New York
At the Law Office of Simon Goldenberg, PLLC, our
New York debt relief attorney can guide you step-by-step through the complex process of filing for bankruptcy
and help you achieve financial freedom. As shown by our Superb Avvo Rating
positive client testimonials, your case is sure to be in excellent hands.
Call (888) 301-0584 or
schedule a free consultation today to discuss your situation.