Do Most People Qualify for Bankruptcy?

If you are struggling to pay your bills and get out of debt, you may be considering filing for bankruptcy. Bankruptcy may be able to help you reduce or eliminate your debt and get back on your feet financially. Before you file for bankruptcy, it is wise to understand the requirements to file for bankruptcy. The requirements are based on the type of bankruptcy you are pursuing. All applicants will need to complete credit counseling and meet income guidelines before they can move forward. 

Do Most People Qualify For Chapter 7 Bankruptcy?

Qualifying for Chapter 7 bankruptcy is often more challenging than qualifying for Chapter 13 bankruptcy. Chapter 7 bankruptcy is also called liquidation or straight bankruptcy. This type of bankruptcy can wipe out many types of unsecured debt. There are several requirements for filing for Chapter 7 bankruptcy, including the following:

  • The average of your monthly income must be lower than the median income for the same-sized household in California. If you do not meet this requirement, you will need to pass the means test. The means test determines whether your disposable income is high enough to make partial payments to unsecured creditors. If you fail the means test, you may still qualify for chapter 13 bankruptcy.
  • You have not filed for a Chapter 7 bankruptcy in the previous eight years
  • You must finish an approved credit counseling course

Do I Qualify For Chapter 13 Bankruptcy?

The requirements to file for Chapter 13 bankruptcy are different from those of Chapter 7 bankruptcy. To file for Chapter 13 bankruptcy, you will need to meet the following requirements:

  • You have enough income to make the monthly debt payments outlined in your bankruptcy plan
  • Your unsecured debts, such as medical bills and credit card debt, must be less than $419,275.
  • Your secured debts, such as your car payments and mortgage, must be less than $1,257,850.These dollar amounts will be in effect until April 2022. The debt limits change every three years.
  • You need to provide proof that you filed federal and state income tax returns for the last four years
  • You will need to complete an approved individual or group counseling course

If you do not qualify for a Chapter 7 bankruptcy, you may be eligible for a Chapter 13 bankruptcy. In some cases, lenders view a Chapter 13 bankruptcy more favorably than a Chapter 7 bankruptcy. They may consider a Chapter 13 bankruptcy filer less of credit risk because, in a Chapter 13 bankruptcy, you will repay all or part of your debts within a three to five year timeframe. In a Chapter 7 bankruptcy case, all of your debts will be erased.

Contact a San Diego Bankruptcy Attorney

Are you wondering whether you qualify for bankruptcy? The attorneys at Bankruptcy Law Center can review your case and advise whether you are eligible for a Chapter 7 and/or Chapter 13 bankruptcy. Contact the skilled bankruptcy attorneys Bankruptcy Law Center today to schedule your initial consultation. 

See What Our Clients Have To Say

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Roger C.

I reached out to BLC to help assist with a chapter 7 business bankruptcy and they provided excellent guidance, advice, and support through the entire process. In my case an adversarial action was filed by one of the creditors and attorney Ahren Tiller and his staff provided sound ...arguments which prevailed. Couldn’t have found a more experienced and supportive team to represent me in a tricky situation. I would highly recommend them to anyone making the difficult but sometime necessary decision to find financial relief. Read more
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Justin R.

Like many others before and during the pandemic, life happenings caused me to be in a financial situation to warrant bankruptcy. The BLC was super professional all the way through the entire process. Right after I paid for my Bankruptcy, I got sick and had to have surgery and recovery. Then we ...were in full Pandemic mode. They were gracious to delay my filing until I was recovered and ready to file. I could not ask for more. The process was over all quick and painless for a simple Bankruptcy like mine. I feel a weight has been lifted and I can rebuild. Thank you for all your arduous work and patience, Gabriel, Ahren, and their teams are knowledgeable and efficient. Read more
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Katey Huntley

Responsive, friendly, kind, extremely easy to work with! So knowledgeable and made this entire process painless. Very grateful!

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Lynn Molina

Gabriel Hanna, Esq and the staff at BLC helped me in a very difficult time. I appreciate all the help and care they gave my case.

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Linda Cramer

I can’t say enough of how much this bankruptcy law firm helped me with my financial situation. They were all so helpful, efficient and made the difficult time and process as quick and easy as possible. I would recommend them to anyone I know and am glad to give my public recommendation as well. T...hey truly deserve a five star plus rating. Read more
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Andrea N.

I am very happy with my experience with BLC. Bankruptcy is not something anyone wants to go through, however everyone at BLC made my experience pleasant and easy. The process was explained thoroughly and I had an easy time reaching out and connecting with my attorney. Anika Renaud-Kim was my attorney ...and she was nothing short of amazing! She was very patient and generous with her time. Ms. Renaud-Kim definitely made me feel at ease and comfortable through the entire process. Read more
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Lidia Paramore

they did a great job for me, helped me anytime I needed something, my Lawyer Gabriel Hanna is the best, gave lots of confidence all the time..thanks BLC I will.always recommend you, I’m very grateful for your service!!!

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Rachael C.

When searching for information I had called a few different firms and received consults. BLC was the only one who didn’t shy away and provided answers and information during the consult. Once I agreed to move forward, they were supportive, informative, and eased my anxiety through the whole process.... I can’t recommend them enough. Read more
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Emily Martinez

AmazingI had many questions and uncertainties and the carefully explained it all and made it easy to understand. They facilitated a fast and easy process making this scary difficult thing simple

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Legal Disclaimer: The Bankruptcy Law Center is a California Licensed law firm with attorneys licensed in the state of CA, NY. Attorney Ahren Tiller is responsible for this advertisement. Bankruptcy Law Center’s principal office is located at 1230 Columbia st. Suite 850 San Diego, CA 92101. Prior results listed on this site do not depict or in any way infer a prediction or outcome.We are a debt relief agency proudly providing options to people with financial problems. View our Privacy Policy