How Does Chapter 7 Bankruptcy Work? By having the majority of your unsecured debt, such as credit card debt, medical bills, and personal loans, officially wiped by a bankruptcy court, Chapter 7 bankruptcy gives you a “second chance” to reclaim control of your finances. Chapter 7 bankruptcy, also known as “liquidation bankruptcy,” is the quickest, easiest, and most popular kind of bankruptcy in Montgomery, or wherever you live.
The court conducts a “means test” for each Chapter 7 bankruptcy filing, meaning that not all applicants are eligible. The bankruptcy means test looks at your financial records to see if your disposable income is below the median income for your state. This includes income, expenses, and secured and unsecured debt. States have different means tests based on income.
Successful applicants for Chapter 7 bankruptcy in Prattville, or wherever you live, are able to wipe out a host of unsecured debts. Dischargeable