For Missouri residents who are currently undergoing financial strain, it is good to know that there are debt relief options available. It is sometimes possible to resolve a financial crisis by cutting back on spending and focusing efforts on paying back debt. However, if things reach a point where these solutions are no longer effective, additional support may be needed, such as filing for Chapter 13 or Chapter 7 bankruptcy.
Each bankruptcy program carries its own eligibility requirements, so it is not a one-size-fits-all deal. In fact, a person may qualify for Chapter 13 bankruptcy but not Chapter 7 and vice versa. As such, if a person is not eligible for a particular program, there is still hope because he or she might qualify for another. Understanding the differences between the two programs can help expedite the process.
Chapter 13 is known as the wage earner’s bankruptcy
Eligibility requirements are one of the main differences between Chapter 13 bankruptcy and Chapter 7. To obtain debt relief under Chapter 13, a person must be able to demonstrate means of reliable income at or above a certain level. On the contrary, the Chapter 7 program provides relief for people whose income is below the median level throughout the state.
Those who have little to zero disposable income are more likely to qualify for Chapter 7 bankruptcy than Chapter 13. There are certain debts that are not dischargeable through either program, including child support and alimony. Scheduling a consultation with a bankruptcy attorney provides an opportunity to explore all options and determine which program best fits a person’s specific needs.
