Living on a restricted income and having ongoing medical needs can make it challenging for you to deal with the endless medical bills that you are incurring. Though you are living well within your means, you may find yourself feeling stressed about your medical debt. One solution that you could find yourself considering is Chapter 7 bankruptcy.
The opportunity to erase your debts in exchange for a fresh start is hard to resist. However, before you rush to file for bankruptcy, you should take some time to learn the requirements so you do not waste your time and can take full advantage of the bankruptcy chapter that best meets your needs.
Because petitioners get to eliminate most of their debts and avoid repayment, Chapter 7 is one of the most common types of bankruptcy solutions people turn to. Despite its appeal, everyone who files is not eligible. To prevent abuse and ensure that petitioners file for the most suitable type of bankruptcy, Chapter7 has income and filing restrictions in place.
Means test limits
Applicants must pass a means test. This test requires the courts to scrutinize your income from the six months preceding the date of your filing. To pass the means test, your income must be lower than the median average income for your household size. Louisiana’sChapter 7 means test income guidelines are as follows:
· For a family of four, the household income must fall under $76,237.
· For a family of three, the household income must not exceed $58,757.
· Two-person household income must fall under $50,732.
· One-person income must not exceed $42,341.
Though there are income limits for Chapter 7, there are no limits on the amount of debt filers can have. Also, Chapter 7 does allow filers to claim exemptions for up to $35,000 worth of property to keep, such as a vehicle. Exemption approvals are done on a case-by-case basis.