Changes in the bankruptcy laws have left many to erroneously think that they can no longer declare bankruptcy. This is not true.

In order to decide whether Chapter 7 is really necessary for you as a debtor, you will need to take a Chapter 7 Means Test.

A chapter 7 bankruptcy can also be referred to as liquidation; although with most cases there is little if any actual liquidation involved. Chapter 7 is referred to as liquidation because all of your non-exempt assets are converted to cash to help pay back the debt owed. It is best to speak with a skilled Texas bankruptcy lawyer if you are unsure whether Chapter 7 is the best option for you.

In general, chapter 7 best suits persons:

1 with income at or below the state median level
2 unable to adequately meet bills and living expenses each month
3 having little or no assets besides clothing and furniture
4 not declaring child support or alimony
5 without fines imposed for violating the law
6 without income tax debt
7 without student loans to repay

1. Set Priorities – Setting priorities can be vital in making sure that you do not get bogged down in the process. By priorities, I mean determining what is important for you. Remember that all the assets are going to be divided. You should figure out if you want to keep the house or not. You should then determine other material possessions and what is important for you. It is important not to get too carried away, because you may not be able to “keep everything”. Realize that your spouse will get things as well. If you have children, determine who will get custody. Then determine a proposed visitation schedule for the other spouse. Children and visitation are often the issues that bog down the divorce procedure.

Under Chapter 7 an individual or business can ask the courts to erase the debts owed creating a fresh start. As soon as you file for bankruptcy you are immediately granted a stay preventing creditors from contacting you to collect, garnishing your wages, taking your home, vehicles or other property, and/or shutting off your utilities.

In order to decide whether Chapter 7 is really necessary for you as a debtor, you will need to take a Chapter 7 Means Test. This test simply compares your income to the median income in your geographic area for your family size. This ensures you, as a debtor, are not trying to abuse the system. The majority of debtors will pass the means test. Contact a Texas bankruptcy lawyer right away to discuss your particular situation.