Understanding the Pros and Cons of Filing for Liquidation Bankruptcy

Declaring bankruptcy is not a resolution approached casually. Disadvantages exist for filing as do benefits. Not only is a person’s credit future put in jeopardy, but likewise it affects his or her self-image and reputation. Although chapter 7 bankruptcy is a fresh start, many people do not know all of what it entails.

Eligibility “Means” Passing the Test

For a person or business entity to qualify for Chapter 7 bankruptcy, income must pass a “means test.” The assessment determines whether earnings are under the state-specific median level for liquidation by examining financial records, including any money awarded, expenses, and loans.

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