The day has come. The day that your debt has become unmanageable. Is there a way to trim the fat?

Enter Chapter 7, one of two personal bankruptcy options. Bankruptcy used to have a negative stigma tied to; it like you weren’t worthy of debt forgiveness or that you were somehow a “lesser” individual if you chose bankruptcy. Maybe you made some poor financial decisions that led to your current financial circumstances, or the debt came to be at no fault of your own. No matter how the debt occurred, those negative stigmas are long gone. Personal bankruptcy is a worthy option for anyone with unforgiving debt

To be approved for Chapter 7, an applicant must meet five specific guidelines.

1. Pass a bankruptcy means test

The means test determines whether Chapter 7 is your best option, or if you should pursue Chapter 13 bankruptcy. The test compares your monthly income to the state-determined median monthly income of a family your size. If your monthly income exceeds the minimum threshold, it would be challenging to get approved for Chapter 7.

If consumer debt, like credit card debt, is to blame for than 50% of the applicant’s debt, the means test is a requirement. If you don’t pass the means test, this means you likely have some money to allocate toward debt repayment. If so, consider pursuing Chapter 13, which focuses on creating a debt consolidation and repayment plan.

2. You identify as one of three options

To qualify for Chapter 7, you cannot identify as a corporation, LLC or a partnership. You must list yourself as a single individual, a married couple who are filing jointly or a small business owner.

3. You have avoided a bankruptcy discharge for the past six to eight years

As bankruptcy law states, you must not have had bankruptcy debts discharged within the past six years (Chapter 13) or eight years (Chapter 7) to qualify. The waiting period begins from the date you filed rather than the date your debts were discharged.

4. Enrollment in credit counseling

Credit counseling is required when pursuing any bankruptcy option and focuses on financial management. This course must be completed before you file a Chapter 7 petition. The Debtor Education class must be completed prior to the Chapter 7 bar date which is usually 3 months after the filing of the petition.

Bankruptcy is way out and can be a savior for anybody seeking financial relief. An experienced bankruptcy attorney can help you decide which relief option is best for you and how to proceed.