Filing for bankruptcy is a daunting process, and, as it involves complicated court procedures, you will want to hire a bankruptcy attorney to help you with your case. But are you even able to file for bankruptcy? Here is a guide to how eligibility for different types of bankruptcy is determined.

Chapter 7 Bankruptcy

In Chapter 7 bankruptcy, your non-exempt assets will be liquidated to pay off some of your debts. Chapter 7 bankruptcy is usually the most advantageous for individuals, as a number of your debts may be discharged. If your debts are primarily non-consumer debts (not involving personal, family, or home expenses), then there are no income restrictions for Chapter 7 bankruptcy.

If your debts are primarily consumer debts, you will have to pass the means test to be eligible. In the test, your past six months of income will be weighed against what Congress has determined as the median cost of living in your state. If your income falls below the median, then you will proceed to the current budget test. If your income is above the median, then you will deduct exempt expenses, such as car and mortgage payments, from your income.

Chapter 13 Bankruptcy

Under Chapter 13 bankruptcy, your debts are consolidated, reorganized, and put on a reasonable payment schedule, as approved by the court. This type of bankruptcy is usually filed for by individuals who have assets and income that are in excess of the requirements to file for Chapter 7, but below the threshold where they would have to file for Chapter 11. If you have less than $383,175 in unsecured debt and less than $1,149,525 of secured debt, you may be eligible to file for Chapter 13.

Chapter 11 Bankruptcy

Almost anyone, including corporations and partnerships, may file for Chapter 11 Bankruptcy. There are no income or debt requirements to file for Chapter 11. But, Chapter 11 is the most expensive and complex of these three options, so it is usually chosen only by individuals who cannot qualify for Chapter 13.

Whether you need a bankruptcy attorney, a divorce attorney, or a criminal defense lawyer, O’Neill Law Firm LLC in La Crosse, WI, has the expertise and experience to help. Call the firm’s office today at (608) 519-3551 to schedule a consultation or visit their website to learn more about their debt relief services.