With a new year approaching, many of us have resolutions that we would like to implement into our lives to accomplish a goal or get rid of any undesired issues in our past such as filing Chapter 7 Bankruptcy Lynchburg VA. One of the most common things that almost everyone wants to accomplish is to improve their financial situation. The new year is the perfect time to do this, and filing for bankruptcy can be a great solution bankruptcy can be a step forward for anyone that feels overwhelmed with debt and is looking for a fresh start.

I realize that some individuals are initially resistant or afraid to seek help, but if you’re struggling and living paycheck to paycheck, being hounded by creditors, or have debt that you are unable to repay, then bankruptcy may be the way out of a financial mess. Not everyone will qualify for Chapter 7 bankruptcy, but if you do, it can sweep debt away and give you that second chance you are looking for and deserve. Here are the requirements for you to file Chapter 7 Bankruptcy Lynchburg VA.

Income Requirements

If you earn less than the median income for Virginia, you’re off to a good start in the bankruptcy process in filing Chapter 7. The median income for a household of one is $60,925.00 annually, or $5,077.08 monthly. For a household of two people, the median income is $77,999.00 annually or $6,499.92 monthly. For each family size there are income limits, and if your currently monthly income is lower than the median income in Virginia for a family of your size then you will not need to complete the means test. This does not necessarily mean you can or should file Chapter 7, but it means you are at least past that income test hurdle. If you earn more than the median income, you may still qualify if you pass the means test in Virginia.

Pass the Means Test

Even if you earn more than the Virginia median income, you might still qualify for Chapter 7 if you can pass the means test, which provides and in-depth analysis of your income, expenses, debt, and other costs of living to see if you can afford your debt. If at the end of this calculation you have no or little disposable income remaining to pay your bills, you pass the bankruptcy means test. As with other factors in bankruptcy, passing the means test alone is not a “free pass” into Chapter 7 but it is an important requirement, among other considerations, that must be evaluated.

Limits on Prior Bankruptcies

If you have previously filed a Chapter 7 bankruptcy within the past 8 years and received a discharge, then you would not qualify for a new Chapter 7. If you discharged debts through a Chapter 13 Bankruptcy within the past six years and if those creditors were paid less than 70% of what they were owed, then you would not qualify as well. You would then need to wait at least 8 years and 6 years from the date of filing, respectively, to be eligible to file a Chapter 7.  Often, though, you can still file a Chapter 13 regardless of how recently you filed the prior bankruptcy, but you may need to file a special “no discharge” type of Chapter 13, depending on a number of factors.

Fraud or Abuse Allegations

If you have violated an order of the bankruptcy court in a case that was filed within the past 180 days, you may be ineligible to file. You may also face objections to your case or challenges to your discharge if the trustee or the trustee’s attorney alleges and proves fraud or abuse in your filing. Examples of this would be hiding assets, liquidating or transferring assets within allowed timeframes without disclosing the transactions. You may also lose your discharge if you don’t complete the required credit counseling course.

Guiding You Through Every Step

At Cox Law Group PLLC, bankruptcy is all we do. Our lawyers limit their practice to representing only individuals and families going through the bankruptcy process. We strive to make our client’s experience as comfortable as possible by assisting you from start to finish. This includes the preparation and filing of the case where the automatic stay begins, through the meeting of creditors, and finally to the close of the case by the Court. Contact us today to schedule a free consultation and get started on the way forward to a better financial future.