You want to file for bankruptcy. You can clearly see how it would help your financial position by eliminating some of the significant debt that you have. You believe that bankruptcy is the correct legal tool to get you to this goal and transform your life.
However, you recently took the means test for bankruptcy, which compares your earnings to the median income in the state. You failed this means test, meaning that you earn too much money or have too many disposable assets to qualify for Chapter 7 bankruptcy. Not everyone is eligible, and you’ve just found out that you are not.
However, you still want to work on your debt, so do you have any other options? What should you do now?
Chapter 13 bankruptcy
One solution is to see if you are eligible for Chapter 13 bankruptcy. This is often available to people who earn enough that they can’t qualify for Chapter 7.
Chapter 13 bankruptcy works much differently. In Chapter 13, the court will help consolidate your debt. You will then be given a repayment plan based on your projected earnings, along with a basic structure regarding when you have to repay it. Generally, this means that you will be making monthly payments for the next 3 to 5 years, until the debt is taken care of.
You can see how much different this is than Chapter 7, which liquidates assets. However, it does still provide some financial relief by restructuring your debt. Carefully consider all of your options as you go through this process. Having experienced legal guidance will help you make the right decision for you and navigate the process.