People seeking to file for bankruptcy tend to want to enter chapter 7 for one reason: it will clear away almost all debts without having to repay them. However, there are some debts that will survive bankruptcy, known as priority debt. Alimony, child support, and student loans are a few of them. All other debts will be eliminated or reaffirmed, depending on their category. Chapter 7 is about liquidation, which means that some assets may be sold to satisfy outstanding debts.

Qualifying for Chapter 7

The means test is the method which a debtor finds out if they're eligible for chapter 7 or not. There's a short way to find out, and a longer way. The short way is thus: if the debtor is under the median income for their family size in the state they live in, they automatically qualify for chapter 7. For those who are over the median, they have to move onto the long form version of the test. In the long form, the debtor is given the opportunity to prove that they are not trying to abuse chapter 7 and that they really do qualify. Monthly bills can be itemized to help make the case that there is almost no money left over at the end of each month.

Filling out the Petition

At this point, it's best to have an outline at hand. The petition itself is written in solid legal language, which is not readily understood. Purchase the book on chapter 7 from NOLO for an authoritative explanation on how to fill it out. Trying to do it without help runs the risk of having the case thrown out on a technicality, which means having to re-open the case or file a new petition.

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